A framework to settle the antitrust lawsuit threatening Paramount's $111 billion acquisition of Warner Bros Discovery has stalled after four state attorneys general broke with the California-led coalition and refused to endorse terms they consider too lenient.

The Gang of Four holds out

Minnesota Attorney General Keith Ellison, New York's Letitia James, Connecticut's William Tong and Washington's Nick Brown have declined to sign off on a deal negotiated by California AG Rob Bonta, according to people familiar with the talks. The quartet, dubbed the Gang of Four, argue the proposed parameters would let Paramount off lightly. Their resistance comes as Democrats, Hollywood figures and activist groups urge rejection of any settlement with what they describe as a MAGA-adjacent buyer.

Terms on the table

Negotiators have floated penalties tied to theatrical release commitments and a two-year structural separation of the combined studios as a temporary measure. A proposed CNN Editorial Board, intended as a governance safeguard, has been dismissed by the holdouts as lacking enforcement power. David Ellison, who runs Paramount, and Bonta both want an off-ramp before a March 2, 2027 trial date, but the four AGs fear cosmetic changes around CNN and cable asset sales could be used to paper over deeper competitive concerns.

Pressure builds

The Writers Guild of America, aligned with the AGs since the July 13 filing, has been sidelined from recent discussions but is fielding member anger as the Block the Merger group stages protests in Oakland, New York and Los Angeles. Guild leadership has contacted James's office to assess the temperature around any agreement. Meanwhile, a $7 million daily ticking fee owed to WBD shareholders kicks in on October 1, adding urgency to the mid-October court-ordered settlement sessions.

Calendar pressure

A hearing on September 24 will test Paramount's request for a $1.88 billion bond from the AGs and the WGA to cover what the company calls extraordinary losses during the wait for trial. The following day, the political calendar, midterm elections and Trump-related dynamics, could further complicate the talks. One M&A veteran said the Yom Kippur pause this weekend may determine whether the negotiations survive or collapse.