California AG: Paramount-WBD Deal Settlement Needs Major Structural Changes

California Attorney General Rob Bonta informed CNBC's David Faber on Thursday that a settlement in the antitrust lawsuit aiming to block the acquisition of Warner Bros. Discovery by Paramount would necessitate "robust structural remedies." This statement came in response to Paramount's efforts to discuss aspects of the deal not central to the lawsuit.

"[Paramount] wanted to talk about everything except for what this case is about. They want to talk about the streaming market, which we don't allege in our complaint. They want to talk about CNN, which is not a focus of our complaint. They want to talk about the foreign regulators. We want to talk about the three markets that we set forth in our complaint, where we think there's antitrust violation," Bonta explained.

Bonta, along with attorneys general from 11 other states, filed a lawsuit in July to prevent the merger. The participating states include Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington.

Initially aiming to finalize the deal by September 30, Paramount has agreed to postpone the proposed acquisition of WBD until as late as June 2027. A trial concerning the matter is scheduled for March.

"I will say that coming to the table has always been on the table. And if [CEO David] Ellison and Paramount want to come to the table in good faith and talk, we want to talk too. We're happy to have that conversation," Bonta said. "We do prefer to resolve cases in the boardroom instead of the courtroom, but for now we're bringing our case, and you know I hope they can focus on the actual allegations we make in our complaint."

The lawsuit specifically targets the projected size of the merged entity, highlighting concerns that it would dominate nearly a third of film production and a similar proportion of basic cable television programming.

A combination of Paramount and WBD would unite renowned film studios like Warner Bros. and Paramount, alongside a vast array of TV networks. This includes Paramount's CBS broadcast network and cable channels such as MTV and BET, as well as WBD's CNN, Discovery, and others. The merger would also consolidate streaming platforms Paramount+ and HBO Max.