PSKY, WBD Merger — Why California Attorney General Rob Bonta Says Paramount-Warner Bros. Discovery Deal Needs ‘Robust’ Remedies

• Paramount has pushed the deal’s potential closing date to as late as June 2027, with a trial scheduled for March.
• Bonta said the states are willing to negotiate if Paramount CEO David Ellison and the company approach settlement talks in good faith.
• The lawsuit states the combined company would control nearly one-third of films and nearly one-third of basic cable TV programming.

California Attorney General Rob Bonta said on Thursday that the group of states seeking to block Paramount Skydance Corp.’s (PSKY) proposed acquisition of Warner Bros. Discovery Inc. (WBD) would require “robust structural remedies” to reach a settlement in the antitrust case.

PSKY stock ended Thursday’s regular session nearly 3% lower and was down another 0.40% in after-hours trading at the time of writing. WBD shares ended the regular session 1% lower but were up 0.20% in after-hours trading.

States Focus On Antitrust Concerns

Appearing on CNBC’s ‘Squawk on the Street,’ Bonta said Paramount “wanted to talk about everything except for what this case is about,” and added, “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 and 11 other state attorneys general filed a lawsuit in July seeking to block the merger. The group also includes Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington.

The lawsuit focuses on the size of the combined company and on how it would control nearly one-third of films and nearly one-third of basic cable TV programming.

Settlement Talks Remain Possible

Paramount initially sought to close the deal by September 30 but agreed to delay the proposed acquisition of WBD to as late as June 2027. A trial is scheduled for March.

There has been widespread speculation about whether Paramount and the states will hold settlement talks to bypass the March trial. Bonta told CNBC that coming to the table has always been an option and that the states are willing to talk if Paramount CEO David Ellison and the company want to engage in good faith.

Bonta said the states prefer to resolve cases in the boardroom rather than the courtroom, but are proceeding with their case.

Paramount Pushes Back On Lawsuit

Bonta said the states had assessed the transaction based on the law and facts under Section 7 of the Clayton Antitrust Act, which prohibits anticompetitive mergers and acquisitions.

“It’s (The law) has been on the books for over a century. And it’s just a straight-up, meat-and-potatoes, black-and-white, bread-and-butter, antitrust case,” Bonta said.

Paramount has previously called the states’ lawsuit a “misrepresentation of competition in the entertainment industry today.” The company said it plans to “vigorously defend the transaction” and demonstrate that the challenge is inconsistent with sound competition policy and the competitive realities of the media marketplace, CNBC reported.

PSKY, WBD Stocks: Stocktwits Retail Sentiment

On Stocktwits, retail sentiment for PSKY remained ‘bullish,’ unchanged over the past 24 hours, while message volume was ‘normal’ at the time of writing. For WBD, retail sentiment was ‘neutral,’ while message volume was ‘normal.’

PSKY stock has lost nearly 24% year-to-date, while WBD shares have declined around 2% during the same period.

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