While direct talks have not officially begun between Paramount and California Attorney General Rob Bonta, the de facto negotiations between the two sides were very much in evidence this week. The first move was made on Sunday by Bonta when he cancelled a meeting with Paramount that had been scheduled to take place the next day. Bonta explained that Paramount had been leaking the content of their confidential talks to the press, and implored the company to “stop playing games.” Many observers saw Bonta’s decision to cancel the meeting as a negotiation tactic itself, demonstrating the legal leverage the state attorneys general have over Paramount.
Since that time, both sides have taken to the press to convey what they might be willing to accept in a potential settlement. Bloomberg reported that Paramount is open to relinquishing ownership of TV channels such as HGTV and Food Network in order to address Bonta’s concerns that Paramount would control an unacceptable number of television channels. Bonta has also indicated that it may require Paramount to make additional “structural changes,” such as selling TNT, TBS, and CNN. Paramount is hesitant to part ways with those channels because they are among the most profitable cable assets in their portfolio, and will be relying on their profits to pay down over $80 billion in debt that they would have after completing the takeover of Warner Bros.
While the two sides are hashing out these details, all parties are feeling the pressure to move quickly to reach a final outcome. Both California’s Governor and the Mayor of Los Angeles have encouraged the parties to reach a deal quickly, while most major exhibitors have finally come around to supporting the deal, most recently with Phoenix Theatres endorsing the deal in this week’s Hollywood Reporter. On the other hand, the concerns of some independent exhibitors have yet to be addressed, such as how the distribution of repertory movies will be handled and the ability for smaller theaters to schedule multiple movies on the same screen at different times of the day.
