Paramount settlement talks include penalty for missing 30-film pledge

By Josh Sisco

 

The settlement talks between Paramount Skydance Corp. and California officials over the planned acquisition of Warner Bros. Discovery Inc. are said to include a financial penalty if the company fails to make good on a promise to distribute 30 films per year in theaters.

 

Paramount would have to pay $30 million for each film that falls short of that goal, according to two people familiar with the discussions who asked to not be identified because the negotiations are private. It could also be forced to sell its stake in Miramax, the studio behind movies such as Pulp Fiction, if it fails to meet the target, one of the people said.

 

While Paramount has promised to distribute at least 30 movies in theaters for some time, California Attorney General Rob Bonta, who has led the litigation for the states, has repeatedly said he opposes such remedies because they are difficult to enforce. The company earlier offered the 30-film pledge to major theater chains to help win their support for the merger. 

 

Paramount may be able to reach the agreed-upon number by releasing some films produced by others, rather than movies the company made itself. 

 

Attorneys general from 12 states, all Democrats, and the Writers Guild trade union have sued to block Paramount’s $110 billion acquisition of Warner Bros., arguing that it would give the company an undue share of the movie and cable-TV industries. 

 

Settlement talks between the parties have accelerated in recent days, Bloomberg has reported. No terms have been finalized.

 

Potential concessions discussed include a significant investment in film production in the US, according to the people. One of the people said the size of the investment promise could be around $1.5 billion. The Wall Street Journal earlier reported that such an investment would take place in California, as well as the potential sale of Miramax.

 

Paramount declined to comment on the negotiations. Spokespeople for Bonta’s office and the Writers Guild didn’t immediately respond to requests.

 

Bloomberg News reported a number of potential settlement terms that were being discussed, including Paramount agreeing to not move from California, a sale of some cable networks and a promise to not negotiate new distribution agreements for all of its channels at once. 

 

Some of the states involved in the suit are opposed to some of the terms being discussed, such as an editorial monitor for CNN rather than a divestiture of the news network, according to two people familiar with the talks.