Paramount Skydance representatives are expected to meet Monday with California's attorney general's office to discuss a possible settlement in the state's antitrust case, according to two sources familiar with the situation.
Paramount has been pushing hard for a deal to allow its $111 billion merger with Warner Bros. Discovery to close. The transaction is currently suspended pending a trial in March in federal court in Oakland.
Attorney General Rob Bonta said he is open to settlement negotiations, but has also noted that Paramount has so far been reluctant to offer the type of structural remedies that would be necessary to satisfy the state's concerns. A Paramount spokesman declined to comment.
Bonta led a coalition of 12 states to challenge the merger in July, arguing it would illegally shrink the theatrical and basic cable television distribution market. The transaction would consolidate two of Hollywood's five legacy studios and two of the three major cable programmers.
Under federal rules, both parties will have to attempt to reach a settlement before an arbitrator at some point. At a hearing this week, Judge Araceli Martinez-Olguin asked the parties to identify two potential arbitrators who could oversee mediation by next Wednesday. A group of stakeholders has recently come out in favour of a settlement, including the Directors Guild of America, IATSE, Los Angeles Mayor Karen Bass and Cinema United, the trade group representing cinema chains.
Paramount has committed to various concessions to try to close a deal, including a promise to make 30 films a year over the next three years and keep them exclusively in cinemas for at least 45 days. However, Bonta's office has argued that such behavioural remedies have proved impossible to enforce in the past.
The Writers Guild of America has filed its own lawsuit, which will be tried alongside the state's case in March. The union is also party to the stipulation keeping the merger suspended until trial, and would have to be party to any global resolution. A Writers Guild spokesman did not respond to a request for comment.
