Paramount Nears Settlement With States Over $110 Billion Warner Bros. Bid

Paramount and the states seeking to block its $110 billion acquisition of Warner Bros. could reach a settlement as soon as this weekend, according to people familiar with the matter. Talks are ongoing, and terms under discussion include independent content monitoring of CNN and a commitment on the number of theatrical releases.

News of the potential deal lifted shares of both companies in after-market trading. Paramount climbed nearly 7%, while Warner Bros. Discovery gained 8.4%.

The lawsuit, filed by California and 11 other states, is one of the last remaining obstacles to Paramount's effort to build a rival to Netflix and Disney. Settling before the end of the month would spare Paramount millions of dollars in fees owed to Warner Bros. shareholders.

A spokesperson for the California Department of Justice said settlement discussions are confidential and declined to confirm or deny whether talks are taking place or what they involve. Paramount also declined to comment.

Paramount CEO David Ellison has staked the company's future on the deal, which would combine two of Hollywood's largest studios and bring together a broad portfolio of television properties, including CNN, HBO, "Harry Potter," "The Daily Show," and rights to NFL football games.

Under the current agreement, Paramount must pay Warner Bros. shareholders a $7 million daily "ticking fee" for each day after September 30 that the deal remains unclosed. The provision was intended to signal confidence to Warner investors.

While Trump administration regulators cleared the transaction, the states sued in July to block it, arguing the combined company would wield enough market power to raise prices for movies and television. The Writers Guild of America has filed a separate suit, contending the merger would lower pay and worsen conditions for film and television writers. A WGA spokesperson did not immediately respond when asked whether the union is participating in the talks.

Other possible settlement terms were not immediately known. California Attorney General Rob Bonta has said structural remedies, such as divesting parts of a business, are more effective at protecting competition than commitments to specific conduct.

Ellison has previously pledged that the combined studios would release 30 films a year. Lawmakers have criticized him over allegations that he tailored news coverage at Paramount-owned CBS News to favor President Donald Trump, and critics have raised concerns about how he would manage Warner's CNN under his ownership.