California just slammed the brakes on what looked like a possible way out of Paramount’s massive legal fight over Warner Bros. Discovery. Settlement talks were supposed to begin Monday, but California Attorney General Rob Bonta canceled the meeting and accused Paramount of “playing games” and negotiating in bad faith.
According to The New York Times, Bonta and Paramount were scheduled to hold preliminary discussions over a possible settlement in the lawsuit seeking to block David Ellison’s proposed $111 billion acquisition of Warner Bros. Discovery, but that meeting never happened. Bonta called it off late Sunday after accusing Paramount of leaking details from an earlier Friday meeting and then misrepresenting what had actually been discussed.
“Not only did Paramount leak the alleged substance of settlement discussions, but they misrepresented these discussions, demonstrating a lack of good faith.”
He didn’t completely close the door on eventually working something out. But Bonta made it pretty clear that Paramount will have to change its approach before California comes back to the table.
“As soon as Paramount stops playing games and engages sincerely, my office is happy to meet again.”
That makes the timing particularly interesting. The planned meeting had been viewed as a potential opening toward ending a legal battle that has been hanging over the Warner Bros. Discovery takeover since July. Instead of getting closer to a deal, the two sides are now publicly fighting over what happened during the negotiations themselves.
Bonta is leading a coalition of 12 states attempting to block Paramount’s acquisition of WBD on antitrust grounds. The states argue that putting the two companies together would concentrate too much power over movie production and cable television programming. The Justice Department already reviewed the transaction and declined to challenge it, but that didn’t stop the states from taking Paramount to federal court.
There’s also a pretty big problem waiting for Paramount if settlement discussions eventually restart. Bonta has indicated that resolving the lawsuit would require “structural remedies,” potentially including asset sales. That is a considerably bigger concession than simply promising to operate the combined company a certain way.
For AEW, nothing suddenly changes because Monday’s meeting was canceled. Its existing Warner Bros. Discovery media rights agreement remains in place, and Dynamite and Collision aren’t disappearing because California and Paramount are fighting in court.
But this is exactly the kind of corporate mess AEW has no control over. The company locked down its future with Warner Bros. Discovery, only for WBD itself to become the target of a $111 billion takeover. Then 12 states sued to stop it. Now a possible settlement meeting has fallen apart before it could even happen because the attorney general leading the case says Paramount isn’t negotiating in good faith.
AEW can keep putting on television while all of that happens above its head. The problem is nobody can say with certainty who will actually be sitting on the other side of that television deal when the dust finally settles—and this latest blowup doesn’t make that answer look any closer.
What do you think this latest setback means for the Paramount-WBD takeover, and should AEW be concerned about all the uncertainty surrounding its television partner? Let us know in the comments.
