At 11 a.m. Pacific today, lawyers for Paramount Skydance and the state attorneys general suing to block the $111 billion Warner Bros. Discovery merger sit down with a judge to talk about a settlement conference.
NBC News’ Scott MacFarlane posted the meeting details earlier this week.
And hours before that meeting, Fox Business’ Charles Gasparino dropped this: Paramount CEO David Ellison has “tricks up his sleeve” to get the Warner Bros. deal cleared in California.
The tweet only teased. Gasparino’s full New York Post column, out this morning, says what the tricks are.
Trick one, per Gasparino’s sources: make Bonta the odd man out in his own party. Governor Gavin Newsom, likely next governor Xavier Becerra, and Los Angeles Mayor Karen Bass all see the lawsuit as weak and bad for California.
Trick two: the warning that if this merger dies, Warner Bros. eventually gets bought by Amazon, Apple, Google, or Netflix and run as a tech company instead of a movie studio.
“These actors and writers and Bonta are such morons when they talk about job losses because of this merger,” a person with knowledge of Paramount’s thinking told Gasparino. “Ellison loves movies and Warner will eventually be sold to Big Tech if this deal doesn’t go through and they can’t wait for AI to start eliminating jobs.”
The Court Already Ordered Them To Try
In cases like this, the court makes both sides at least try to settle before trial, with a second judge assigned to run the talks. That judge was named last week.
Today’s meeting is about setting those talks up. It is the first step back toward the table since Bonta canceled on August 24, accusing Paramount of leaking details and “playing games.”
The gap, per the Wall Street Journal: the states want some Warner Bros. cable channels sold off and the two movie studios kept separate. Paramount has offered promises instead, like 30 movies a year in theaters, which Bonta calls an “old, stale promise.”
Paramount and Warner Bros. also file their formal answer to the lawsuits today, their line-by-line response to the accusations.
The Cards Ellison Is Already Showing
The rest of the cards are already on the table.
Paramount says the merger is ready to close and wants the states and the WGA to post a $1.88 billion bond, with that hearing set for September 24.
The $7 million-a-day fee to Warner Bros. shareholders starts October 1. That is also Ellison’s reported deadline to settle before Paramount starts moving out of California, and our insiders have said the move is real, with Tennessee the destination, and Gasparino’s list starts with Nashville.
The coalition has cracks, too. New Jersey Democrats want their own attorney general out of the lawsuit, and Iowa and Montana have taken the dispute to the Supreme Court.
Warner Bros. is holding one card of its own: a $7 billion breakup fee if the deal dies. That buys the company a few years on its own: “We’ll be OK for a while but in a couple years we will have to figure out what to do,” one WBD executive told Gasparino.
UPDATE: The meeting produced dates. Paramount and Bonta will sit down for two straight days at the end of October.
Whatever Ellison is holding, October 1 is when he has to play it.
