Editor’s Note: This story has been updated to reflect the movement in shares of Paramount Skydance and Warner Bros. Discovery.
Paramount Skydance Corp. (NASDAQ:PSKY) is reportedly in advanced settlement talks with California’s attorney general Rob Bonta, who is leading a coalition of states challenging its roughly $110 billion acquisition of Warner Bros. Discovery (NASDAQ:WBD), with potential concessions including a $1.5 billion investment in California film and television production.
Shares of Paramount Skydance and Warner Bros. Discovery surged 7.30%, each during Monday’s pre-market trading session.
The negotiations include Paramount’s commitment to remain in the state and retain its studio lots, after the company had previously considered relocating amid opposition to the deal, according to a report by The Wall Street Journal.
Additional potential penalties were discussed if Paramount fails to meet its earlier commitment to produce 30 movies annually post-merger. These penalties could include selling its stake in Miramax, the division known for classic films such as “No Country for Old Men” and “Pulp Fiction”.
Other measures being considered include selling some cable channels and establishing an editorial board to safeguard CNN’s independence. Paramount had been considering such a board even before the lawsuit, but no final agreement has been reached, and the terms remain uncertain.
However, some states are seeking additional concessions, with New York AG Letitia James pushing for specific job guarantees for Warner Bros. employees and Connecticut AG William Tong seeking stronger safeguards for CNN and CBS News’ editorial independence, CNN reported on Sunday.
Paramount did not immediately respond to Benzinga’s request for comments.
US Antitrust Fight Delays Paramount Deal
In July, Paramount delayed its planned purchase of Warner Bros. to as late as June 2027, due to a multistate antitrust fight. The company called the revised schedule a "significant win," saying it provides a direct path to trial while challenging the states’ market definitions as disconnected from current market realities.
A coalition of Democratic-led states led by Bonta and the Writers Guild of America sued to block the Paramount-Warner merger, citing antitrust concerns and potential job losses for Hollywood writers.
In August, a federal judge scheduled the antitrust trial over Paramount’s proposed acquisition of Warner Bros. Discovery for March 2, 2027, delaying the merger by at least seven months. The delay is expected to cost Paramount more than $1 billion in ticking fees by the time the March trial begins.
Despite the U.S. hurdles, Paramount secured European Union antitrust approval for its acquisition after agreeing to end its film distribution joint venture with Universal Pictures.
Ellison Confident in WBD Deal
Last month, Paramount Skydance Corp’s CEO David Ellison expressed high confidence in the deal with WBD, downplaying the antitrust lawsuits as not being about competition but about trust. In an Op-ed published by The New York Times, Ellison said, "I believe this fight is not really about market share…The issue is whether I can be trusted as a steward of Warner’s CNN."
During the company’s second-quarter earnings call, the CEO stated that the merger would strengthen the company’s streaming and content business, making it better positioned to compete with larger rivals like Netflix Inc. (NASDAQ:NFLX) and Amazon.com Inc. (NASDAQ:AMZN).
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy: Shutterstock
© 2026 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
To add Benzinga News as your preferred source on Google, click here.
