bonta

California Atty. Gen. Rob Bonta’s deal to allow the $111-billion Paramount-Warner Bros. merger to proceed was struck amid political pressure from state leaders and concern from some Democratic attorneys general that concessions from the studio fell short, according to multiple sources familiar with the negotiations.

As recently as this weekend, New York Atty. Gen. Letitia James and Connecticut Atty. Gen. William Tong — who had signed on to the lawsuit — had said they needed more concessions, according to three knowledgeable sources close to the negotiations.

In an interview with The Times on Tuesday, Tong said Bonta was “doing his very best in very difficult circumstances” to steer the coalition to a favorable outcome, but amid “a lot of political pressure” from others in California that “did not help.”

“I’m not going to sugarcoat it. This is ultimately not what I wanted,” Tong said.

Tong said one of his chief concerns — shared by others in the 12-member coalition of states — was with the merger’s consolidation of CNN and CBS News under Paramount Skydance Chief Executive David Ellison, the billionaire media mogul close to President Trump and son of Oracle co-founder and Republican mega-donor Larry Ellison.

Tong raised similar concerns after the announcement of the deal, when he said publicly that his state had “led the fight to the bitter end to protect the editorial independence of CNN and CBS News,” and that he was “deeply disappointed that we could not do more.”

Paramount declined to comment.

With its economy and global reputation heavily intertwined with Hollywood’s allure and ability to survive, California had more at stake in the negotiations.

In exchange for the states lifting their antitrust challenge, Bonta said Monday that the studio had agreed to either produce 30 or more films annually for the first five years of the combined company or divest the Miramax film studio; separately negotiate basic channel agreements for Paramount and Warner Bros. or divest from major cable channels; spend $300 million more each year on film production in the U.S.; maintain its Melrose Avenue and Burbank lots; and establish a board to ensure editorial independence at CNN and CBS News, which also fall under the merger.

Bonta said the deal has “real teeth,” and that he “will hold Paramount accountable” moving forward.

Since then, however, other Democrats have voiced less confidence, and some in the coalition believed they could have held out for better terms as the midterm elections approached.

Some also questioned whether Bonta and other California leaders were swayed by Ellison’s threat to move Paramount out of the state.

Gov. Gavin Newsom, Los Angeles Mayor Karen Bass and Xavier Becerra — the front-runner in the race to succeed Newsom as governor — had all urged Bonta to settle the case. In his initial statement on the deal, Ellison thanked the Democratic attorneys general for working through their differences, but also thanked Newsom for “his support throughout this process.”

Sen. Cory Booker (D-N.J.), the ranking Democrat on the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, said Bonta and the other state attorneys general “took on one of the most powerful media companies in the world, a company backed by the full weight of the White House,” and that Paramount had answered “with what amounted to extortion” by threatening to withdraw from California if the deal was blocked.

Booker claimed the merger remains illegal and questioned the independence of any editorial board picked by and reporting to Ellison — saying it would not stop him from making “sweeping changes at CNN” to please Trump.

“This is what happens when federal enforcers abandon their posts. States are left to carry the fight alone, and even the strongest state enforcers cannot outlast a company willing to say anything and spend anything,” Booker said. “That is not justice. That is a price tag.”

Dissent before the deal

The pace of the negotiations, which had been on-again, off-again for weeks, quickened last week, and Bonta’s office had reached a deal with Paramount by Friday, sources said.

But there was a last-minute hiccup: Some members of the coalition felt the deal fell considerably short of what they had been seeking.

Among other things, James was dismayed that the Writers Guild of America — which had separately sued to block the deal — hadn’t been brought into the negotiations. She pushed to include the WGA and to bolster Paramount’s commitment to the WGA’s health and pension fund.

Over the weekend, Paramount agreed to increase its health fund commitment from $10 million to $17.5 million. Still, the WGA had largely been shut out of the process, and said Monday that it continued to “believe the merger will cause damage to writers and the industry at large.”

One source familiar with the negotiations said the states had four separate votes against settling on Sunday, but the resistance eventually crumbled with word that the WGA was backing out of the fight. Two sources familiar with the matter said some in the coalition were caught off guard by the speed with which Bonta’s “tone” changed and the deal was reached. Some had felt Paramount may be more inclined to grant concessions once it had to start increasing its payout to Warner Bros. investors starting Oct. 1.

On Tuesday, Bonta told The Times that he would not comment on “what specifics led up to” the deal, except to note that all 12 state attorneys general in the coalition signed on to it.

“It was unanimous, and I’ll leave it at that,” he said.

Bonta said there was certainly “a lot of interest” in the case from other elected officials, some of whom made their positions clear, but that “none of it had any influence” on him.

“I need to look at the law and the facts,” he said. “If we’re able to get a solution to our antitrust concerns, we take it.”

Bonta said he could not comment on what effect Ellison’s threats to move Paramount out of California might have had on his decision and that his “focus was on the antitrust concerns” — which he believes the deal substantially addresses.

A source close to the governor’s office said Newsom communicated frequently with Bonta and Ellison, acted as an unofficial mediator and urged them to reach a resolution, but did not try to control the terms of the deal and respects Bonta’s role as the state’s independently elected law enforcement leader. Newsom appointed Bonta as California’s attorney general in 2021 after Becerra, who was serving in that post, accepted a position in President Biden’s cabinet. California voters elected Bonta as attorney general in 2022.

The source said Newsom wanted the two sides to settle the case because he was concerned that the state could face protracted litigation, ultimately lose in court and end up with nothing. Paramount leaving California for Nashville — a destination floated by Ellison — also would have been an economic blow to the state.

Newsom has tried to keep businesses headquartered in the state due to the economic and budgetary impacts of losing companies and their wealthy chief executives to other places, and recently signed legislation to create a new post-production tax credit for studios. Last year, he doubled the state’s existing film and television tax credit in an effort to support the industry.

Mixed reaction

Newsom and many of Bonta’s fellow attorneys general echoed his claims of victory.

James said the deal “will allow the film and television industry to continue to thrive with more movies produced in America and $1.5 billion of new investment in film production.” Oregon Atty. Gen. Dan Rayfield said it “keeps real competition in place, ensures that productions will continue, and ensures journalistic independence.” Arizona Atty. Gen. Kris Mayes said it would protect businesses, including local movie theaters. Colorado Atty. Gen. Phil Weiser said it would protect “moviegoers and producers.”

In a statement, Newsom thanked Bonta for his work to reach the deal, which he called “a practical path forward” that “protects California jobs while putting a safeguard in place to help preserve editorial independence for two of America’s most important news organizations.”

Still, it was clear that others viewed the deal as a partial win at best.

New Mexico Atty. Gen. Raúl Torrez called it a “great first step.” Massachusetts Atty. Gen. Andrea Joy Campbell said the states were “unable to secure every protection we fought for,” and that she “would have liked to see more.” Minnesota Atty. Gen. Keith Ellison stressed that the deal should not be seen as an endorsement of the merger.

“I believe mergers like this are never done with the best interests of consumers, workers and small businesses in mind and are instead designed to help a select few get richer,” he said.

Some outsiders were even more forthright with their skepticism. Rich Greenfield, a longtime media analyst, called the deal a “slam dunk win” for Paramount because it didn’t require the company to sell off any assets. Norm Eisen, co-founder of the Democracy Defenders Action group, said the “so-called independence board” to oversee CNN and CBS News “appears to be sorely lacking in independence.”

Bonta said the deal does set out structural divestment remedies if Paramount does not follow its other terms — including by requiring it to sell off Miramax if it doesn’t produce enough films, and to sell off BET, VH1, Comedy Central and other channels if it doesn’t negotiate cable agreements for Paramount and Warner Bros. separately.

He said that if the state had held out and gone to trial on its antitrust arguments, it would not have been able to negotiate any journalistic oversight for CNN and CBS, whereas the “creativity and flexibility of settlement” allowed them to establish the oversight panel.

“Does that transform our information ecosystem broadly, to make sure that there’s no more misinformation or disinformation? No. Does it make sure that all broadcast news and cable channel news organizations are only telling fair, fact-based, independent, objective news? No. Does it even ensure that happens every single time at CBS News or CNN? No,” Bonta said. “Does it improve the likelihood, vastly, significantly, that that outcome will occur? It does.”

Did California come out a winner when Atty. Gen. Rob Bonta settled a multi-state lawsuit against Paramount Skydance on Monday, allowing its $111-billion purchase of Warner Bros. Discovery to move forward?

That’s the question everyone is trying to figure out, as the 32-page agreement is parsed, with pundits pouring over minutiae of cable streaming and tax credits. I’ll leave that to the business experts, but I’m here to give you a big picture of politics, power and possibilities — and one short but unsatisfying answer about whether this deal is good for the Golden State: Yes and no.

I’ll start with this: Did California win is the wrong question. There was always something bigger at play here that was lost behind the fear of further decimation to an industry so central and crucial to the state. The question the lawsuit asked is, “Do we live in an America where government institutions are so broken that power makes its own rules?”

The settlement might not give the entertainment industry all it hoped for but it was “a fight worth fighting,” said George Hay, a professor at Cornell Law School and a former attorney with the U.S. Department of Justice’s Antitrust Division, because it sought to answer that question in favor of consumers, and showed that states like California can and will step up to fill a dangerous void.

Under the Trump administration, the U.S. Department of Justice hasn’t so much abdicated its responsibility to enforce antitrust laws — it has embraced an oligarchic ethos that seems happy to feed the American economy into the mouths of behemoths, allowing companies such as Paramount free reign to gobble up whatever lies in their paths like an old-school Pac-Man.

Our president personally invests in industries he’s supposed to regulate (I’m looking at you, Silicon Valley). Corporations dump money into elections that average people can never hope to match. The free press is under increasing attack with multiple outlets banned from the White House — including CNN, which Paramount hopes to own along with CBS and whose editorial independence is at least addressed in this settlement, albeit weakly.

States, even powerful states such as New York and California, don’t have the muscle or money of the federal apparatus, and were never meant to play the role of national enforcer on issues such as these.

The fact that Bonta and the 11 other states involved in the antitrust litigation pulled together not just a credible, but effective team is a victory for all American consumers, and a message to other Pac-Man companies out there that even if federal regulation is on life support, there are still rules.

The states “showed that they could quickly and effectively put together a formidable litigation team, and achieve significant initial success. That’s a big deal. That that changes the role of the states for a long time into the future,” said William Kovacic. He’s a law professor at George Washington University and a former chair of the Federal Trade Commission, so like Hay, he knows a bit about antitrust enforcement.

“This has a ripple effect that goes through the entire federal enforcement system because they showed they could do something that was very difficult,” Kovacic said. “That’s a big institutional win for the states.”

To hear Bonta describe it, California is absolutely a winner in its own right, though, and this will be “very good” for the state. Which to be fair, is exactly what any decent politician would say.

“It will be good for consumers, good for prices, good for jobs, good for choice, quality, competition,” Bonta told me Monday afternoon.

Kovacic is a bit more measured, calling it a “modest win.”

The deal has many parts, but it covers a five-year period in which the new Paramount mega-studio must release between 30 to 32 films each year, many in theaters and some independent. It also has to keep open and running both the Paramount and Warner Bros. lots, a not-insignificant source of L.A. jobs — and maybe one of the most visible wins for the city.

The new company also must spend at least $1.5 billion over the five years on production in the U.S., and increase that figure if there are certain, uncapped federal or state tax credits available to them.

In California, where the budget deficit is in the billions, creating uncapped credits may be a hard sell, but Bonta told me he’s making it a priority in the next legislative session and will push the next governor — likely Xavier Becerra, who once held his job — to back them.

“I think we’re going to get it in California,” he said. It’s somewhat important because the settlement doesn’t specifically address production in California — and tax credits from other states have been drawing production away for years.

We’ll see how successful Bonta is on that endeavor — he hasn’t always gotten what he wants from governors.

Much has been made about the recent threats from Paramount Skydance Chief Executive David Ellison to move business operations out of California. That pressure has been cited as one of the factors pushing the state to settle, and it probably was — but not just because of Ellison.

Gov. Gavin Newsom made it clear that he preferred a settlement to a drawn-out court case, especially after that threat.

You may recall our governor has presidential aspirations, and is in a long-running battle with Trump over whether California is a wasteland for business beset by fraud and regulation, or a utopia of economic activity fueling the world’s fourth largest economy. Paramount reupping its threat to leave, or even worse, decamping for someplace such as Nashville, is not a great look.

So this case, which was never going to be a slam-dunk to win in court and which could easily have run into 2028 if it proceeded, was never a winning issue for Newsom.

Newsom Monday called the deal “a practical path forward,” which it definitely is — for him.

Hay, of Cornell, said it was a “big blow” when the governor failed to back Bonta and go all-in on litigation.

“Once [Newsom] once came out on the other side, it made things really, really difficult,” Hay said.

So there was pressure on Bonta to make a deal even from his friends, though Bonta told me that “what you call pressure was just noise to me. I never felt pressured in this process.”

But of course, nearly everything that happens in politics and litigation is about pressure — who has the power to apply it and who has the power to withstand it. Bonta, to his credit, applied pressure where Paramount never expected it.

“If I were in California, I’d be proud of the attorney general. At the end of the day, he got the best he could,” Hay said. “I’m glad they were there when the government bailed out because it made Paramount tow the line, and maybe that’s all that we could hope for.”

The Paramount settlement is more about possible than perfect, but it proved that states — and consumers — are not powerless, and every brawl that proves that is, as Hay said, a fight worth fighting.

California Atty. General Rob Bonta and Paramount Skydance Chief Executive David Ellison have reached an agreement to end the state’s antitrust fight, paving the way for Ellison to complete his $111-billion purchase of Warner Bros. Discovery, said a person familiar with the matter.

The two sides have agreed to resolve antitrust claims that Bonta and 11 other state attorneys general brought in late July, said the source, who was not authorized to comment publicly on the settlement.

As part of the deal, Paramount agreed to pay a penalty if the company fails to make good on a promise to distribute 30 films per year in theaters and to spend $1.5 billion on film production in Hollywood over the next five years, said the source who was not authorized to comment.

Representatives of Paramount and Bonta did not respond to a request for comment.

A federal judge must approve the agreement. Paramount would then be poised to quickly finalize its purchase of Warner Bros. Discovery — a blockbuster combination that will reshape Hollywood by collapsing two historic film studios with rights to Batman, Harry Potter, “Top Gun,” and Bugs Bunny and by combining the HBO Max and Paramount+ streaming services.

In addition to CBS, Paramount would own dozens of cable television channels, including CNN, TBS, HGTV, Food Network and Comedy Central.

The road to a resolution was fraught. Bonta abruptly canceled a negotiation session with Paramount in late August after potential deal terms leaked. Then, after talks restarted and the settlement began taking shape, several powerful Bonta allies, including New York Atty. Gen. Letitia James and Connecticut Atty. Gen. William Tong, signaled their displeasure with proposed deal terms.

They felt the deal points didn’t go far enough to mitigate the potential clout Paramount would wield over the film and television industries if it was allowed to swallow its larger industry rival, according to three people familiar with the matter but not authorized to comment.

Ellison’s goal had long been to complete the Warner takeover by the end of September — before midterm Congressional elections and prior to a key deadline for Paramount to increase its payout to Warner Bros. Discovery shareholders. Ellison received a boost from California Gov. Gavin Newsom, Los Angeles Mayor Karen Bass and Xavier Becerra, the Democratic nominee for California governor, who pressed Bonta to end the dispute rather than take the case to trial in Oakland in March.

Newsom said he took “seriously” Paramount’s threat to leave the state. He advocated for a settlement behind the scenes, according to two people close to the matter who were not authorized to comment.

State Attorney General Rob Bonta in 2025. (Genaro Molina/Los Angeles Times)

(Genaro Molina/Los Angeles Times)

Ellison was highly motivated to strike a deal because his company’s expenses will soon accelerate. Beginning Oct. 1, Paramount is on the hook to pay Warner investors a “ticking fee” of 25 cents per quarter, per share until the deal closed. That obligation is expected to add $7 million a day to the cost of the $31 a share that Paramount agreed to pay Warner shareholders when it won the bidding war back in February.

Paramount’s takeover will be heavily leveraged. The company’s bankers have lined up nearly $80 billion in debt to finance the merger. Ellison’s father, billionaire Larry Ellison, late last year agreed to backstop the $47-billion in equity needed to complete the acquisition. Royal families from Saudi Arabia, Qatar and Abu Dhabi have agreed to chip in $24 billion for an equity stake by assuming some of Ellison’s financial commitments.

Late last week, the Federal Communications Commission approved Paramount’s request to allow the foreign investors to own nearly 50% of the merged company. The Ellison family, however, will retain its voting control.

Paramount has promised Wall Street that it would make more than $6 billion in cost cuts. A recent Los Angeles County economic report predicted the merger could lead to an estimated 4,500 workers in the Los Angeles region losing their jobs as Ellison works to combine the two companies.

The truce comes after Paramount received clearances from regulators around the world, including the European Commission, Canada and the U.S. Justice Department.

But despite those approvals, Paramount spent weeks over the summer wrangling with Bonta and applying political pressure. Ellison threatened to move his studio from its historic Melrose Avenue address to Texas or Tennessee.

Larry Ellison separately announced plans to switch the headquarters of his software behemoth Oracle to Nashville from Austin, Texas (after Oracle relocated from Silicon Valley six years ago).

Paramount also enlisted major Hollywood unions, the Directors Guild of America and the International Alliance of Theatrical Stage Employees, and prominent cinema chains to drop their opposition to the deal.

Bonta’s suit had leaned heavily into potential harms to theatrical distribution and lawyers for the states had been banking on theater executives’ testimony at trial.

The parties also were facing a key court hearing Thursday. Paramount was poised to ask U.S. District Judge Araceli Martínez-Olguín in Oakland to make the states and the Writers Guild of America post a $1.88-billion bond that would cover some of Paramount’s delay-related deal costs should the company eventually prevail.

The states and the WGA, which also sued to block the merger, have balked at the request, which was designed by Paramount to create fissures within the coalition of states by raising doubts about the strength of their case.

Paramount’s high-profile lobbying campaign reached a crescendo in late August after Paramount called out activist-actor Mark Ruffalo, accusing him of resorting to “antisemitic tropes” to argue against the merger.

Prominent Jewish groups rushed to Paramount’s aid. Ruffalo, who frequently works with HBO, denied the allegation, saying he had a 1st Amendment right to speak against the deal as well as Oracle’s business ties to Israel. Numerous Jewish artists came to Ruffalo’s defense, saying his free speech rights were being squelched.

Bonta abruptly canceled a settlement conference, accusing Paramount of leaking confidential information.

“If you want to have an adult, legitimate, serious settlement discussion — no problem,” Bonta said during an Aug. 25 appearance in Los Angeles. “But if you want to play games, we’ve got better things to do.”

The states’ 37-page lawsuit, filed in the U.S. District Court for Northern California, claimed the Paramount-Warner combination would violate the U.S. Clayton Act, a century-old antitrust law to prevent mergers that weaken competition and raise costs for consumers.

The states, which also included Nevada, Colorado, Oregon, Washington, New Jersey and New Mexico, had argued the tie-up of two legacy movie studios would give Paramount-Warner too much marketshare in two categories — wide-release movies and potential blockbusters.

Paramount Skydance CEO David Ellison has pressed to get his blockbuster deal done before his company must make higher payouts to Warner Bros. Discovery shareholders and before the mid-term elections, which could change the makeup in Congress.

(Mark Schiefelbein / Associated Press)

The states also said Paramount-Warner would control nearly 30% of the cable television channel space with more than 50 networks.

Paramount has been facing a June 4 deadline to complete the deal — or owe Warner Bros. Discovery a $7-billion breakup fee. Paramount has already paid $2.8-billion to cover a termination fee paid to Netflix after the streamer withdrew from the auction in February.

Tensions flared on the eve of a critical week ahead for Paramount Skydance’s proposed $111-billion acquisition of Warner Bros. Discovery, amid new urgency for talks aimed at settling antitrust litigation brought by California Atty. Gen. Rob Bonta and 11 other states.

Over the weekend, opposition intensified to a proposed settlement as details trickled out, including a proposal to establish a bipartisan editorial board to monitor cable news channel CNN, one of Warner’s premier properties that Paramount Chief Executive David Ellison would control along with CBS News.

It wasn’t clear Sunday whether a proposed settlement would require Warner to sell off assets — something Bonta repeatedly has insisted upon. Critics of the deal urged Bonta and other state attorneys general to resist pressure to reach a settlement that would allow Ellison’s deal to move forward.

“State Attorneys General, please hang tough against the giant proposed Paramount-Warner Brothers merger,” Rep. Jamie Raskin (D-Md.) wrote on social media late Saturday.

“Paramount, run by the Ellisons, should not own both CBS and CNN. California must not cave and take a deal that leaves both under the same owner,” Rep. Ro Khanna (D-Fremont) wrote.

Bonta and Ellison have made progress in the talks in recent days, according to four people familiar with the matter not authorized to speak publicly.

However, New York’s Letitia James and at least two other attorneys general who joined Bonta’s lawsuit in July privately have expressed reservations about the proposed compromises, believing they don’t go far enough to mitigate concerns about the power Paramount-Warner Bros. would wield over the film and TV industries should the merger go through, according to the people familiar with the matter.

James isn’t on board with Bonta’s proposed settlement, two of the people said. A potential split within Bonta’s coalition could be a setback because Bonta needs the other state attorneys general who joined his legal effort to sign off on any deal.

A spokesperson for Bonta did not respond Sunday to a request for comment.

Paramount maintains its deal to bring HBO, CNN, CBS, TBS, Comedy Central and two legendary film and television studios together would create a stronger company that could withstand the fierce competition from tech giants such as Apple, Netflix, Google (which owns YouTube) and Amazon. The two studios, on their own, would not be strong enough on their own to remain viable in the streaming age, the company has said.

On Thursday, Paramount lawyers plan to demand that U.S. District Judge Araceli Martínez-Olguín in Oakland require the states and the Writers Guild of America to post a $1.88-billion bond that would cover some of Paramount’s delay-related deal costs should the company eventually prevail.

The states and the WGA, which also sued to block the merger, have balked at the request, which was designed by Paramount to create fissures within the coalition of states, which also include Minnesota, Oregon, Colorado, Connecticut, New Jersey and Massachusetts.

Ellison wants the merger finalized by Oct. 1, when his company will be obligated to make a higher payout to Warner Bros. Discovery shareholders. The company has threatened to move its Hollywood base from its historic Melrose Avenue lot to Tennessee or Texas should the antitrust battle stretch into October.

The prospective loss of an iconic California business — a century-old film studio that helped establish Hollywood — has rattled state and local politicians, who are fearful of losing more jobs at a time when Los Angeles film production levels already are at alarming lows.

Gov. Gavin Newsom, Los Angeles Mayor Karen Bass and Xavier Becerra, the Democratic nominee for California governor, have publicly called on Bonta to settle the suit rather than prepare for a trial next spring. City Councilmember Nithya Raman, Bass’ opponent in the L.A. mayor race, has been one of few California politicians in support of Bonta’s fight.

In an opinion essay Sunday, a trio of 1st Amendment and antitrust experts dismissed Paramount’s threat to leave Los Angeles as a ploy that doesn’t make business sense.

“Ellison’s threat is empty, and the AG should call that out — not give into it,” the experts — Fiona Scott Morton, Gene Kimmelman and Norm Eisen — wrote in the Contrarian.

Both Morton, an economics professor at the Yale School of Management, and Kimmelman formerly served in the U.S. Justice Department during Democratic administrations. Eisen, founder of the group Democracy Defenders Action, is helping lead the Block the Merger campaign.

“Paramount [would be] sinking the cost of moving before it knows what businesses it owns and how best to combine and organize them — which makes expensive strategic mistakes inevitable,” the trio wrote. “A company that raises its own costs while leaving behind the most valuable labor in the industry does not threaten California; it threatens itself.”

The group noted Paramount, in its regulatory filings, still lists its Times Square offices in New York as its corporate headquarters — not its Melrose Avenue campus in Hollywood.

“There is also the possibility that Ellison is planning to move Paramount to Tennessee regardless of how the lawsuit resolves,” the group wrote.

Bonta and Paramount have discussed including in any settlement a condition that Paramount would keep its operations in California for a set period, according to people familiar with the proposal but not authorized to comment.

Merger opponents planned a Sunday evening rally outside Bonta’s offices in Oakland to encourage him to stand tough. The group plans subsequent demonstrations this week outside James’ office in New York City and the Paramount lot in Hollywood.

The jockeying comes as President Trump, who favors the Ellison takeover of CNN and Warner Bros., has sought to block several prominent news organizations, including CNN and Politico, from reporting from the White House.

“Trump just locked CNN out of the White House. Now his billionaire allies want to own it,” Sen. Cory Booker (D-N.J.) added in a Sunday post. “State attorneys general: Don’t settle. Hold the line. Block this merger.”

After a bitter standoff, Paramount Skydance and California Atty. Gen. Rob Bonta have made progress in settlement talks that could push Hollywood’s massive merger over the finish line, people familiar with the matter said Friday.

The two sides have quietly been negotiating a truce to end the antitrust lawsuit brought by Bonta and 11 other Democratic state attorneys general — a legal volley that has threatened to derail Paramount’s $111-billion takeover of Warner Bros. Discovery.

It’s not clear how close to a resolution the two sides are, but talks in recent days have been constructive, one of the knowledgeable sources said.

Paramount Chief Executive David Ellison is highly motivated to end the court battle with Bonta before Oct. 1, when his company will be obligated to make a higher payout — an extra $7 million a day — to Warner Bros. Discovery shareholders on top of the $81 billion the company has already agreed to pay.

For weeks, Ellison and his team have been ratcheting up political heat on Bonta to abandon his lawsuit, including threatening to pull Paramount out of Hollywood — a scenario that has rattled state and local lawmakers who desperately want to bring film jobs back to Los Angeles, not lose thousands more.

Paramount declined to comment.

A spokesperson for Bonta’s office said in a statement: “Potential settlement talks are confidential. We cannot confirm or deny whether settlement talks are occurring or their alleged substance.”

Both sides have incentives to settle. Ellison, who has leaned on his family’s connections to President Trump and Washington Republicans, would like to avoid taking on more debt for the already highly leveraged deal. And he is eager to close the transaction and take the reins at Warner Bros. before the midterm elections.

Bonta has been on a winning streak with favorable rulings against the Trump administration and social media giant Meta, and he doesn’t want to overplay his hand or risk having his coalition of state attorneys fall apart.

Earlier this week, the two sides agreed to sit down for court-mandated settlement talks in mid-October. The two sides were set to meet in late August but Bonta pulled the plug on those sessions, accusing Paramount of leaking misinformation and “playing games.”

The Wall Street Journal first reported the two sides were in advanced talks.

This is a developing story.

Paramount Skydance will meet with California Atty. Gen. Rob Bonta’s representatives next month for court-ordered settlement talks that could clear a path for David Ellison’s $111-billion takeover of Warner Bros. Discovery.

The two sides will convene for two days, Oct. 14 and Oct. 15, according to court documents filed this week.

The talks come as both sides look for ways to resolve the pitched battle over Hollywood’s industry-reshaping deal, which would put HBO, CBS, CNN, TBS, Food Network, Comedy Central and the Paramount and Warner Bros. studios under one roof. Bonta and 11 other Democratic state attorneys general sued in July to block it, and Ellison’s team has been stoking political pressure on Bonta to retreat.

Bonta canceled preliminary last month after details of a session on ground rules leaked, accusing Paramount of “playing games” by violating a confidentiality agreement and spreading misinformation.

Bonta’s Paramount case appears to have ruffled the Trump administration. He sued one month after the U.S. Justice Department blessed the merger without demanding concessions — a decision he said showed federal officials were not doing their jobs to enforce antitrust law. This week the department weighed in on Paramount’s side.

“The United States enforces the federal antitrust laws and has a strong interest in their correct application,” the Justice Department said in a Tuesday filing, describing its unique position to bring antitrust actions. Its “statement of interest” argued that the plaintiffs had sued as “private persons,” who must clear higher hurdles than the federal government.

The department also asked the judge to force California, the other states and the Writers Guild of America to post a $1.88-billion bond, covering fees Paramount would owe Warner Bros. Discovery shareholders if the deal isn’t finalized by Oct. 1. Paramount agreed to the so-called ticking fees earlier this year, confident the deal would sail through regulatory review. Bonta’s office said Wednesday it stands by its earlier filings arguing it should not have to post the bond. A hearing is set for Sept. 24.

Paramount’s chief legal officer, Makan Delrahim, has been quarterbacking the campaign for Warner Bros. Discovery. He served as Trump’s antitrust chief in his first administration, when he led an unsuccessful effort to block AT&T’s takeover of the company, then known as Time Warner Inc. That 2018 deal was the first of two acquisitions that saddled Warner Bros. with instability, strategic misfires and a mountain of debt, paving the way for the Paramount bid — which would mark the third time in a decade the storied studio has changed hands.

Trump has been eager for Ellison to shake up CNN, a Warner property, following his reboot of CBS News, which has coincided with diminished ratings at “60 Minutes”.

Ellison’s company has won approvals from more than 65 international regulators, and Paramount expects the Trump-appointed Federal Communications Commission leadership to sign off on a foreign ownership arrangement that would give Middle Eastern royal families a nearly 50% equity stake in the merged company. Bonta’s lawsuit is the remaining obstacle to closing.

Paramount Skydance Chief Executive David Ellison faces a pivotal decision: Should he uproot his Hollywood studio — the birthplace of such film classics as “Sunset Boulevard,” “The Godfather” and “Beverly Hills Cop”?

Paramount floated shifting its home base to Tennessee or Texas in July, hoping to deter California Atty. Gen. Rob Bonta from waging a legal battle to block Paramount’s $111-billion acquisition of Warner Bros. Discovery.

Bonta rejected the tactic, calling it “blackmail.” His antitrust lawsuit, filed in collaboration with 11 other Democratic state attorneys general, has since stalled the largest Hollywood merger in decades and put Ellison in a jam.

The 43-year-old tech scion — a film aficionado who has spent two decades building his career in Hollywood — has told associates he doesn’t want to leave L.A. But he has signaled that he’s prepared to sell the historic studio lots and move Paramount’s and Warner Bros.’ operations from California if the merger isn’t finalized by next month, according to people familiar with the situation who were not authorized to comment.

The prospect has rattled a region already reeling from steep declines in film production, heavy job losses, empty soundstages and shuttered small businesses.

“It would be devastating,” Assemblymember Rick Chavez Zbur, who represents a district that includes the Melrose Avenue movie lot and neighborhoods near Warner Bros. in Burbank, said of a Paramount move. “We need to do everything we can to protect these important jobs in California’s iconic industry.”

Paramount declined to comment.

Ellison is frustrated after securing approvals from more than 65 regulators worldwide for the mammoth merger that would bring HBO, CNN, CBS, Comedy Central, MTV and TBS under the same roof.

Bonta’s lawsuit stands in the way.

“California is the fourth-largest economy in the world and the best place to do business,” a spokesman from Bonta’s office said. “Strong antitrust enforcement is essential so everyone can benefit from a vibrant economy.”

A federal judge in Oakland temporarily blocked the deal, prompting Paramount to agree not to finalize the acquisition until after a trial or June 1, whichever comes first. Settlement talks collapsed in late August after Bonta accused Paramount of leaking and misrepresenting their discussions.

Paramount has plenty at stake. U.S. District Judge Araceli Martínez-Olguín set the trial for March, but the company urgently needs the valuable Warner assets to better compete against tech behemoths. And beginning Oct. 1, Paramount must increase its payout to Warner Bros. Discovery shareholders by $7 million a day, so-called ticking fees that will heap more debt onto the highly leveraged transaction.

Paramount asked the judge to require California and other plaintiff states, including Nevada, Oregon and New York, along with the Writers Guild of America (which also sued) to post a $1.88-billion bond that could compensate Paramount for ticking fee costs. A hearing is set for Sept. 24.

For weeks, Paramount’s most potent weapon has been its in-the-works plan to leave L.A.

Lobbying has been intense, prompting a parade of politicians led by Gov. Gavin Newsom, L.A. Mayor Karen Bass and gubernatorial nominee Xavier Becerra to urge the two sides to settle the lawsuit.

“It’s a game of chicken,” Kevin Klowden, an economist and managing director at the Melcene Advisory firm, said in an interview. “But I’m not dismissing the threat because it is very real.”

Relocating from Los Angeles would allow Ellison’s cash-hungry media company to qualify for lucrative tax incentives offered by another state. Ellison’s short list includes Tennessee, Texas and Georgia. But leaving its longtime home would be costly for Paramount too, given how much of the talent and deal-making remains concentrated around L.A.

Tennessee’s Department of Economic and Community Development declined to discuss its negotiations with Paramount, but in a statement a spokesperson said the state “remains committed to working with companies across a wide range of industries that are exploring opportunities to invest and grow in Tennessee.”

Early this month, a pro-merger group was set to hold a news conference outside Paramount, but it moved its gathering to a warehouse a few blocks away after anti-merger activists planned a counterprotest.

The pro-merger organization, Neighbors for Strong Communities, was incorporated in Washington, D.C., in June and has lobbed text messages to Californians urging them to press Bonta to drop the case.

Speakers were concerned with just one issue: What would happen should Paramount pull out?

“What are we going to do with all these people who have invested their lives and many generations into building something here?” asked Keyla Wood, who moved from Mexico to L.A. about a decade ago after getting her start in Spanish-language soap operas.

“It’s been one thing after the other: The pandemic, the strikes and then it was the fires,” said Wood, who has worked as a stand-in for Eva Longoria and Salma Hayek. “So many people never work again.”

David Ellison is deciding whether to leave Hollywood.

(Bloomberg via Getty Images)

L.A.’s very identity is at stake, added Daniela Kelly, an actor and dancer who arrived from Brazil two decades ago.

“Everyone in the world sees Los Angeles and Hollywood as the platform for their dreams,” Kelly said. “Imagine if a huge studio with 100 years of history here just leaves? What will we be?”

Businesses like Kelly’s small Kreashen Studios USA, which provides video and podcasting space in Marina del Rey, depends on the region’s entertainment economy.

“It’s difficult financially right now to keep open,” she said. “So I’m pro having Paramount stay because this is the center, the heart of Hollywood.”

But deal opponents and some experts say the merger would actually worsen L.A.’s already bleak production picture.

Paramount has promised to cut $6 billion in expenses — a figure that doesn’t factor in the cost of ticking fees, which would add $650 million each quarter to the $81 billion that Paramount had anticipated paying Warner shareholders.

“We’ve seen from previous mergers that jobs have been lost,” L.A. City Councilmember Adrin Nazarian said at a City Hall event recently.

Combining Paramount and Warner could result in the elimination of nearly 4,500 positions over three years and put at risk an additional 5,865 jobs within businesses that serve the studios, according to an August report by the Los Angeles County Department of Economic Opportunity.

“When you look at the economic impact, it’s pretty staggering,” Kelly LoBianco, the department director, said in a recent interview. “An estimated $4 billion in economic output lost, and another $550 million lost in tax revenue at the local, state and federal level.”

The merger also could erase $79 million in tax revenue to Los Angeles County even if Paramount stays in L.A., she said.

But state and county tax revenue would plummet further should Paramount dispatch hundreds of its workers to Tennessee or some other state, Klowden said.

“If Ellison moves all the management out and all of the productions out, you’re talking about potentially tens of thousands of jobs,” Klowden said. “That, bluntly, isn’t just devastating to L.A. That becomes devastating to everybody.”

A report commissioned by Paramount from Los Angeles Economic Development Corp. predicted even steeper losses of at least 28,000 jobs should the studio move its entire operation out of state, according to a draft report given to Politico.

Under a less dire scenario, Paramount could shift its corporate headquarters to another state to qualify for incentives but still maintain large staffs in the creative hubs of Los Angeles and New York, where the company has its legal headquarters.

When the Ellison family acquired Paramount from the Sumner Redstone family last year, Ellison shifted operations to L.A., where he and other key executives work on the Melrose Avenue lot.

The threat to pull up stakes has created a disconnect after Ellison has spent more than a year touting how his family’s growing collection of media properties would strengthen traditional Hollywood.

The relocation campaign echoes a tactic used by software giant Oracle Corp., co-founded by Ellison’s billionaire father, Larry Ellison. For three decades, Oracle thrived in Redwood City, Calif., but in 2020, the company moved its headquarters to Austin, Texas, joining other California tech firms leaving in protest of the state’s high taxes.

The elder Ellison announced in 2024 that Oracle would be moving again, this time to Nashville, although that relocation hasn’t been finalized.

Paramount would risk leaving behind a skilled talent pool filled with experienced production workers and entertainment executives, Klowden said.

Fleeing L.A. could prompt “a talent bleed-out,” Klowden said. “Creative types are like: ‘Would I feel comfortable moving there?’ And, ‘What if I move there and something goes wrong? There would be nowhere else for me to go.’”

He pointed to Nissan’s 2006 U.S. headquarters move to the Nashville area from Gardena in L.A.’s South Bay, which dramatically reset the automaker’s workforce as fewer than half of its Southern California employees made the trek to Tennessee.

On Friday, a magistrate judge told both sides to identify dates in late October to meet for court-ordered settlement talks.

Each has motivations to settle — including avoiding a years-long court fight. Bonta has said Paramount must be willing to part with assets to alleviate market concentration, which could lead to a sale of Warner’s New Line Cinema, which has rights to “The Lord of the Rings” and “The Conjuring” franchises, and potentially cable channels such as CNN, Food Network or Cartoon Network.

Paramount, as part of a settlement, could abandon plans to leave L.A.

“All of the parties need to understand what this [issue] means to workers and small businesses,” Zbur, the local Assembly member, said. “I’m hopeful for a settlement that assures that Paramount and Warner Bros. will maintain their operations and remain a significant economic and employment force in Los Angeles.”

Times staff writer Cerys Davies contributed to this report.