Bonta calls off Paramount settlement talks
Talks between Paramount and the state AGs have to start sometime. But they won’t start today.
Lawyers for the two sides met on Friday to set an agenda for a formal Monday meeting involving Paramount execs and California AG Rob Bonta.
News of the expected meeting leaked right away, and then the WSJ’s Joe Flint and Jessica Toonkel published an exclusive story last night with apparent details from Friday’s prep meeting.
In response, Bonta canceled the meeting, claiming that “Paramount did not maintain the confidentiality” of the Friday prep session.
“Not only did Paramount leak the alleged substance of settlement discussions, but they misrepresented these discussions, demonstrating a lack of good faith,” he said in an overnight statement, sent first to the NYT’s Laurel Rosenhall in a nice bit of NYT vs. WSJ gamesmanship.
“As soon as Paramount stops playing games and engages sincerely, my office is happy to meet again,” Bonta added.
A Paramount spokesperson declined to comment when I asked this morning.
Opinions differ, but I think this just reiterates that the states hold most, if not all, of the cards right now. Paramount CEO David Ellison is obviously eager to settle this standoff months ahead of the trial date next March. The company is also threatening to move out of California to get its way.
But Bonta is insistent on “robust structural remedies” that would change the shape of the media mega-merger. And he has 11 other states and the Writers Guild of America in his corner. The court has mandated mediation between the parties, so there will be talks, but right now Bonta’s office might just be “going through the motions to get the politicians off his back,” as Flint said on X over the weekend.
Flint and Toonkel reported that Bonta wants Paramount “to divest some cable channels and commit to keeping its movie studio separate from Warner Bros.” They added, “taking a hands-off approach to Warner Bros. is a nonstarter for Ellison, a person familiar with his thinking said.”
Earlier Sunday, I asked LightShed Partners analyst Rich Greenfield, who’s been tracking Paramount–WBD as closely as anyone, about the dynamics at play.
“The main question is whether Paramount is prepared to settle with structural remedies,” Greenfield said. If not, the talks wouldn’t go very far.
“Paramount may be correct on the law,” he said, and correct to believe that it will prevail through the legal system. But the clock is working against the company, between the October “ticking fee” start, the March trial date, and the June merger agreement expiration.
“The only way to settle before a trial to ensure they can close before the WBD agreement expires in June is to offer structural remedies for both film production and linear TV,” he asserted.
I asked: Can you think of any structural remedies that wouldn’t destroy the merger’s business logic? Many observers have argued that Paramount can’t agree to divest Warner’s cable channels (like CNN) because it needs the free cash flow that the channels provide.
Greenfield agreed it would be hard, likening it to threading a needle. “Losing the CBS News/CNN synergies feels like a nonstarter,” he said. And “the other obvious challenge for selling cable networks is that there is not a robust market for them, so you would be selling them for a fraction of the price you are buying them for.”
And on the film/TV production side, appeasing the state AGs would likely “require selling one of the studio lots and a chunk of high-profile IP,” Greenfield said, though maybe it’s possible to “leave enough IP/catalog content to justify the original business logic, even if it is weakened from what Ellison and team hoped for.”
I asked Greenfield if the mere existence of talks could count as a PR win for Paramount, enabling the company to portray the other side as unreasonable, and he asked, “Unreasonable to whom? The only people that matter are the Judge and the 12 AGs led by Bonta, right?”
On Friday, Paramount issued a lengthy statement against one of its top critics in Hollywood, Mark Ruffalo, accusing him of invoking “antisemitic tropes” in his campaign against the merger. Variety’s Matt Donnelly has a full accounting here.
The ADL and several other Jewish advocacy groups also criticized Ruffalo, who pushed back over the weekend with a post on X that said “the accusation that I am antisemitic is appalling and fundamentally dishonest.”
He also defended his scrutiny of the merger, calling it “fair and necessary” to probe a $111 billion deal giving “one family control over CNN, HBO and Warner Bros., backed in part by foreign money whose influence on editorial decisions has never been fully explained to the public.”
Of note: Ruffalo’s post has garnered 27 million views, according to X, far surpassing the social media reach of Paramount’s statement.
Arbitrator Sarah Miller Espinosa has ordered The Washington Post “to rehire the opinion columnist Karen Attiah, who was fired in September over her social media posts about the assassination of the conservative activist Charlie Kirk,” the NYT’s Ben Mullin scooped this morning.
Espinosa found that “The Post ‘did not have good and sufficient cause’ to terminate Ms. Attiah and ‘violated’ its labor agreement,” Mullin wrote. The publication was also ordered to compensate Attiah with back pay.
Attiah said she is “willing to go back” to her role at the Post, and hopes the decision “sends a message to journalists and media institutions everywhere that freedom of expression is always worth fighting for.” Here’s a gift link to Mullin’s piece…
Another big one from Mullin this morning: Research firm founder RJ Shook has issued a statement explaining why he paid Forbes editor Randall Lane $6 million — a shocking breach of journalistic ethics that led Forbes to fire Lane last month.
Shook says Lane “provided professional advice and guidance” for a decade, including “assistance in connection with my efforts to sell the company.” But he now says “the payment was a mistake…”
Just how thoroughly has President Trump taken control of Justice Department decision-making? Read this gobsmacking WSJ story, “The Trump Intervention That Got the DOJ Off Live Nation’s Back,” for answers. Here’s a gift link.
The story by Rebecca Ballhaus, Joe Palazzolo, Dana Mattioli, Josh Dawsey and Dave Michaels is chock full of details about Trump’s pressure — and a Kennedy Center connection. Key sentence: “Many DOJ officials regarded the political interference in the Live Nation case as extreme even for an administration in which the president has openly pressured law-enforcement officials to pursue perceived enemies and pardoned allies.”
David Nelson was a captain in the US Marine Corps from 1971 through 1973. On Saturday, he emailed Pentagon spokesman Sean Parnell. Nelson has allowed me to quote from it.
“Mr. Parnell—I am an 81 year old Marine and find this situation very disturbing,” he wrote… “The Pentagon has fired the Stars and Stripes’ ombudsman (she is suing), publisher, editor in chief, and a reporter. Will this venerable newspaper soon be controlled and force fed favorable military stories only? Will our troops become less patriotic or lethal if they read a story unfavorable to the military?”
Nelson attached some examples of unfavorable but accurate stories in Stars and Stripes from the early ’70s. He wrote, emphasizing the word independent, “I am grateful that when I was a Marine stationed in Okinawa during the Vietnam War, I could read news that was published in an independent Stars and Stripes.”
Nelson was reacting to Friday’s firings at Stripes, which came amid an ongoing pressure campaign by Pete Hegseth’s public affairs department. Here’s my recap.
The Pentagon installed Navy Capt. William Urban as “military deputy to the publisher” shortly before firing publisher Max Lederer, raising severe concerns about the paper’s long-cherished independence.
For decades, that independence “has hinged in part on its civilian leadership, which helps ensure the publication doesn’t turn into pro-government propaganda,” WaPo’s Liam Scott and Scott Nover wrote.
Urban wrote in a Friday memo that he received “multiple assurances” from Pentagon leadership about keeping Stripes independent. But a new directive approved by Parnell says, among other things, that the paper must avoid “the publication of material that would adversely affect national security or clearly endanger U.S. personnel.”
“Adversely affect national security” is an awfully broad standard. Stripes published stories as recently as Friday that Pentagon leaders could find objectionable.
As I said on “The Source,” the firings at Stars and Stripes are part of Hegseth’s wider effort to control information and replace the press with propaganda. Barbara Starr followed up with these questions about Hegseth: “What is he so afraid of? Is he afraid of truth? Is he afraid of transparency? Is he afraid of independent voices out there, telling the story of what the US military has been up to?”
“CBS Sunday Morning” told the Stripes story — and highlighted concerns about Pentagon censorship — in early July. Editor Erik Slavin and reporter Lara Korte were told they were fired for speaking to CBS. “They said that I was insubordinate for responding to a hypothetical about censorship, saying that it was a red line,” Slavin told CNN’s Erin Burnett.
Well, forcing journalists from their jobs for giving an interview sure crosses a line…
>> TikTok and its parent company, ByteDance, “reached a $400 million settlement with the US Justice Department over children’s privacy litigation,” Ramishah Maruf wrote. (CNN)
>> The aforementioned Scott Nover profiled conservative journalist John Solomon and his new, strange status as “chairman of the newly formed and vaguely defined Government Transparency Task Force.” (WaPo)
>> Citing Circana BookScan data, Casey Loving and A.J. Katz reported that Jason Arday’s memoir “sold just 433 print copies in its first five days.” (TheWrap)
>> Meghan Markle’s “UK acting deal is off,” Tina Brown reported. (Fresh Hell)
>> “Spider-Man: Brand New Day” became “the No. 6 release of all time at the worldwide box office with $2.22 billion.” For context, “Titanic” is No. 5. (THR)
“Obsession” has “crossed $500 million at the global box office, becoming the first original film of the 2020s to do so,” TheWrap’s Jeremy Fuster reports. The film “also stands as the highest grossing festival acquisition of all time and the highest grossing film ever with a budget of less than $1 million.”
>> The New York Times “has begun testing its first generative AI tool for readers,” Max Tani reports. (Semafor)
>> FCC chair Brendan Carr “is scrutinizing ABC’s St. Louis affiliate switch, escalating his fight with broadcast networks. Even conservative business groups think this one is a government overreach,” the aforementioned Joe Flint writes. (WSJ)
>> A Texas appeals court “sharply reduced” the amount that Alex Jones owes the parents of one Sandy Hook victim from $49 million to $6 million, “citing a Texas damages cap,” Elizabeth Williamson reports. Jones still owes “over $1 billion in other cases.” (NYT)
>> Speaking of Jones, Kayla Cobb recently took a look at The Onion’s new Infowars. Cobb says “what started as a way to mock Alex Jones is turning into a complete erasure of his legacy under Ben Collins and Tim Heidecker.” (TheWrap)
This edition of Reliable Sources was edited by Andrew Kirell and produced with Liam Reilly. Email us your feedback and tips here.