Paramount shares rose 5 percent in after-hours trading Friday and Warner Bros Discovery gained 6 percent after The Wall Street Journal reported the studio was in advanced settlement talks with California Attorney General Rob Bonta and eleven other states over the $111 billion merger. The move reversed a slump that has left Paramount down 23 percent in 2026 and WBD underwater for the year. Sources close to the discussions say the conversations are preliminary, focused on structuring the agenda for a court-ordered settlement conference already set for October 14 and 15 in San Francisco.
The calendar drives the conversation
A federal judge ordered Paramount, Warner Bros Discovery and the state plaintiffs to appear for the two-day session. The talks now underway between David Ellison’s team and Bonta’s staff are described as mid-level staff work to define what gets discussed when principals eventually sit down. “This is part of the process before you get the principals onboard,” one person with direct knowledge said. “The end is not nigh.” A $7 million daily ticking fee payable to WBD shareholders begins October 1, adding pressure but not urgency, according to the same source.
Remedies on the table
The states’ complaint centers on studio consolidation and cable network concentration. Bonta has said a behavioral remedy such as committing to release at least 30 films a year would not satisfy the plaintiffs. Scenarios under discussion include Paramount operating the combined film and TV studios separately for a period after close, and spinning out some of the more than 50 cable networks in the merged portfolio to stay within antitrust limits. The Justice Department and other major jurisdictions approved the deal with no conditions.
Silence from both sides
Paramount declined to comment on whether negotiations are occurring or their status. Bonta’s office issued a standard confidentiality statement, confirming neither the existence nor the substance of talks. Notably, the attorney general did not repeat last month’s accusation that Paramount leaks had scuttled a previous round of discussions. The antitrust suit was filed July 13 with a trial date of March 2, 2027.