California Attorney General Rob Bonta announced a settlement in the state’s antitrust lawsuit against Paramount Skydance Corp. on Monday, allowing the company’s proposed $111 billion merger with Warner Bros. Discovery Inc. to proceed. The agreement, reached after months of legal challenges, removes the final regulatory hurdle for the deal, which was initially expected to close in the third quarter of 2024.
Gov. Gavin Newsom (D-Calif.) publicly denied allegations that he pressured Bonta to settle the case. Speaking to Axios on Wednesday, Newsom stated, “I didn’t pressure anybody,” adding that he had consistently encouraged Bonta to prioritize negotiations over litigation. Newsom referenced public remarks by Bonta, who had previously indicated a preference for resolving the matter outside the courtroom.
Bonta confirmed the settlement during a press conference, emphasizing that the agreement was not an endorsement of the merger itself. “This settlement is not a vote of support for this merger; it is not a blessing of the broader merger,” he said. The attorney general did not provide additional details about the terms of the settlement.
Reactions and Political Context
Critics of the merger had accused Bonta of caving to corporate pressure, citing reports that Paramount CEO David Ellison had threatened to relocate the company’s headquarters out of California if the deal was not approved. Newsom dismissed these claims, stating that Ellison’s intentions were not a factor in the state’s decision. “I made the point… that we preferred… that he focus on getting this done at the boardroom, not the courtroom,” Newsom said.
The settlement follows a wave of public backlash against Bonta’s lawsuit, including criticism from Hollywood figures. Actor Mark Ruffalo drew attention for linking the merger to broader geopolitical issues, which some insiders suggested influenced the attorney general’s shift in approach. A report by journalist Charles Gasparino alleged that Ruffalo’s comments—described as antisemitic by critics—prompted operatives within the California AG’s office to distance themselves from the lawsuit. Paramount Skydance Corp. and major Jewish organizations in Hollywood condemned Ruffalo’s remarks.
Legal and Industry Implications
The merger between Paramount and Warner Bros. Discovery, if completed, would create one of the largest media conglomerates in the entertainment industry. The deal has faced scrutiny from antitrust regulators in multiple states, with California’s lawsuit representing one of the most significant challenges. The settlement removes a major obstacle, though other regulatory reviews may still impact the timeline.
Bonta’s office has not disclosed the specific terms of the agreement, including any concessions made by Paramount or Warner Bros. Discovery. The attorney general’s office did not respond to requests for further clarification.
Statements from Key Figures
- Rob Bonta (California AG): “This settlement is not a vote of support for this merger; it is not a blessing of the broader merger.”
- Gavin Newsom (California Governor): “I didn’t pressure anybody… I made the point… that we preferred… that he focus on getting this done at the boardroom, not the courtroom.”
- Paramount Skydance Corp.: Did not immediately respond to requests for comment on the settlement terms.
The merger is now positioned to move forward pending final regulatory approvals.