A federal judge was expected to hold a hearing Thursday on the proposed settlement between Paramount-Warner Brothers Discovery and state attorneys general, including California’s top prosecutor Rob Bonta.
The hearing was scheduled for 11 a.m. in Oakland federal court via Zoom.
U.S. District Judge Araceli Martinez-Olguin said the hearing would address the proposal, which details conditions to resolve the lawsuit brought by California and 11 other states in July challenging the potential merger of Paramount Skydance and Warner Bros. Discovery.
The Writers Guild of America joined the states’ lawsuit, contending the merger would hurt jobs for Hollywood writers. In a statement to its members Monday, the union said it continues to oppose the merger, but in light of the settlement reached by the states, it consented to the deal because it was faced with the prospect of “forging ahead alone in a lawsuit that would cost millions of dollars through trial.”
News of the settlement came after weeks of acrimony between Paramount and Bonta over the proposed combination of two of Hollywood’s largest studios.
Bonta led a coalition of 12 state attorneys general in filing the antitrust lawsuit in July seeking to block the deal, arguing that combining Paramount and Warner Bros. would reduce competition in the movie and television industries.
Paramount has disputed those claims and argued the merger would give the combined company the scale to compete with larger technology and entertainment companies.
The companies subsequently agreed not to complete the merger until June 1, 2027, or until after a court ruling on the states’ claims, whichever comes first. Previously, the two sides agreed to participate in court-ordered settlement talks Oct. 14 and 15.
A previous effort to hold settlement discussions collapsed in August when Bonta canceled a planned session and accused Paramount of leaking information from confidential discussions and “playing games.” Paramount
denied being the source of the leaks.
Ellison had additional financial incentive to resolve the dispute before Oct. 1. Under the terms of the planned merger, Paramount would be required to pay Warner Bros. Discovery shareholders an additional $7 million a day beginning Oct. 1 on top of the $81 billion it has agreed to pay them if the lawsuit was not resolved.
Paramount had also increased pressure on state and local officials in recent weeks by threatening to move the company out of California if the legal fight continues. The possibility has raised concerns among officials seeking to stem the loss of film and television production jobs from the Los Angeles area.
The merger has received regulatory approvals in more than 65 nations.
The Federal Communications Commission has also approved a foreign ownership structure for the proposed combined company.
A federal trial on the states’ antitrust challenge was scheduled for March, but that would be vacated if the settlement is approved.
