Warner Bros. Discovery jumps 7% and Paramount 5% as California settlement talks advance

SentiSense · Published Sep 21, 2026, 1:13 AM ET · Updated Sep 28, 2026, 2:45 AM ET

Paramount Skydance is in advanced settlement talks with California's attorney general over its bid for Warner Bros. Discovery, with a $1.5 billion California production commitment and CNN editorial safeguards among the concessions discussed. Warner Bros. Discovery rose 7% to $29.74 and Paramount Skydance 5% to $10.76 on the reports. New York and Connecticut attorneys general remain holdouts, and California's own AG opposes the proposed per-film penalty.

Paramount Skydance is in advanced settlement talks with California Attorney General Rob Bonta over the antitrust suit blocking its acquisition of Warner Bros. Discovery, Reuters reported late on September 20. The concessions under discussion include a $1.5 billion investment in California production, a commitment to distribute 30 movies annually, a board to help ensure CNN retains editorial independence, no sale of the studio lot, and a possible Miramax divestment. The California AG's office would not confirm the talks, saying only that potential settlement discussions are confidential.

The market reaction was larger on the target than on the acquirer. WBD rose 7% to $29.74 while PSKY gained 5% to $10.76, a split consistent with pre-market trade, where Warner Bros. Discovery was up 7% against Paramount's 6.3%. Netflix moved 0.45% and the communication-services sector fund 0.7%, so this was deal-specific merger-arb repricing rather than a sector move. Our own quotes later in the session had the same ordering, with Warner Bros. Discovery ahead of Paramount, on volume in Paramount running 4.4 times its average.

Two numbers describe the same transaction and should not be read as a range. The February 27, 2026 agreement valued Warner Bros. Discovery at $81 billion in equity; the $110 billion figure used by Reuters and others is the gross transaction size including roughly $80 billion of debt financing.

The remaining obstacles are political and unsettled. Bonta leads a 12-state coalition, but New York Attorney General Letitia James is resisting over worker protections and Connecticut's William Tong is pressing to preserve the independence of CNN and CBS News. Bloomberg reports the terms would make Paramount pay $30 million for each film it falls short of the 30-film pledge, with a forced sale of its Miramax stake as an alternative penalty, but Bonta has repeatedly said he opposes such remedies as difficult to enforce and no terms have been finalized. Investors should treat every figure here as a proposal, and watch for a filed consent decree rather than further reports of talks.