California Attorney General Rob Bonta canceled a meeting with representatives of Paramount Skydance, which was scheduled for Monday, August 24, The New York Times (NYT) reports. It was planned to discuss the settlement of a lawsuit filed by 12 states in order to prevent the company from acquiring the Warner Bros. media holding. Discovery (WBD).
Monday's meeting was supposed to be preliminary, and there were no guarantees that it would lead to constructive negotiations on a settlement, the newspaper said. However, the possibility that the parties would move towards an agreement was seen as something of a breakthrough after Paramount threatened to leave California and the state's Governor Gavin Newsom spoke in favor of a settlement, the newspaper added.
“Paramount not only disclosed the purported contents of the settlement negotiations, but also misrepresented them and demonstrated a lack of good faith. Once Paramount stops playing games and starts being sincere, my office will be happy to resume negotiations,” Bonta said in a statement to the NYT.
The Californian Prosecutor General cited leaks in the media as the reason for the disruption of the meeting. On the evening of Sunday, August 23, The Wall Street Journal (WSJ) published a report that, according to sources, lawyers for both sides had a preliminary meeting on Friday, August 21. The purpose of this meeting was to set the agenda for Monday, including a discussion of cable television and the film industry. As the business publication expected, Bonta was going to demand that Paramount sell off some of its cable channels and keep Paramount Pictures and Warner Bros. individual film studios.
“Selling or spinning off even a few cable networks could hurt Paramount's earnings and make it difficult to service the nearly $80 billion in debt it would have after the deal closes,” the WSJ explains.
As a reminder, Warner Bros. last year entered into active negotiations about its sale and in December announced an agreement with streaming giant Netflix. Paramount Skydance, which was considered the second bidder to acquire the assets, said it would continue to try to outbid the bid, which was successful. The deal with Paramount was approved by WBD shareholders in April, and in June by the US Department of Justice, which did not find any signs of a monopoly in the potential merger.
After Paramount won the bid and the deal was approved by the Justice Department, Bonta and 11 other colleagues from states where the Democratic Party is in power went to federal court. They said their analysis highlighted the risk of job losses and a new company gaining control of nearly a third of the cable television market, as well as a similar share of the country's movie box office.
The takeover talks have sparked controversy in the US, with US President Donald Trump calling for a change in ownership of liberal news channel CNN, which he has accused of bias. The head of Paramount Skydance is David Ellison, the son of Trump ally, billionaire Larry Ellison.
Several prominent Democrats, including California Gov. Gavin Newsom, Los Angeles Mayor Karen Bass and Democratic gubernatorial candidate Xavier Becerra, have called on Bonta to settle the lawsuit rather than take the case to trial next spring, the Los Angeles Times (LAT) reported.
