The Paramount-California settlement talks over the $110 billion Warner Bros. Discovery merger have hit an abrupt roadblock, with California Attorney General Rob Bonta canceling a planned meeting while accusing them of bad faith. The talks were aimed at resolving California’s antitrust challenge, as the state and 12 other attorneys general seek to block the deal over competition and consumer concerns. Paramount now faces another complication with an antitrust trial set for March.

Bonta has explained what prompted him to call off the settlement meeting, laying out his concerns about how Paramount handled the preliminary discussions.

California Attorney General Rob Bonta has accused Paramount of acting in bad faith, telling The New York Times that the studio leaked details from a Friday meeting. He said the company also presented those discussions inaccurately, prompting him to cancel a follow-up meeting scheduled for Monday. Paramount did not immediately comment on the accusation.

“As soon as Paramount stops playing games and engages sincerely, my office is happy to meet again,” Bonta said, making clear that the door to future discussions remains open. The canceled meeting was only preliminary, with no guarantee that it would develop into substantive settlement negotiations. Still, its collapse removes a potentially important opening in the dispute.

The prospect of negotiations had appeared particularly significant after Paramount threatened to leave California and Governor Gavin Newsom indicated that he favored resolving the lawsuit. Bonta, who made the statement to The New York Times, had previously maintained that only structural remedies would satisfy the state, potentially requiring the companies to sell portions of the combined business. Naturally, executives tend to dislike that particular arithmetic.

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With California pulling out of settlement talks and Los Angeles facing $2.8 billion in costs due to the deal, Paramount has plenty to ponder.

With the preliminary settlement talks now canceled, Paramount faces a costly stretch between the breakdown and the March 2, 2027 antitrust trial. The company could begin paying roughly $7 million a day in ticking fees after September 30 if the merger remains unfinished. That makes simply waiting for court far more expensive than it sounds.

Paramount could also try to bring California back to the table by considering the structural remedies Rob Bonta has demanded, potentially including asset sales. David Ellison must simultaneously decide whether to follow through on his threat to move Paramount operations out of California in October. With negotiations stalled, Paramount must now balance concessions, costs and courtroom strategy to keep the $111 billion Warner Bros. Discovery merger alive.

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Do you think Paramount will be able to overcome its latest obstacle? Let us know in the comments!