California Attorney General Rob Bonta accused Paramount’s leadership of leaking information and acting in bad faith as he canceled a planned meeting with the media giant’s executives scheduled for Monday to discuss a potential settlement in the state’s antitrust suit to block Paramount’s acquisition of Warner Bros. Discovery.

In a statement shared with Deadline and the New York Times early on Monday, Bonta said Paramount leaked “alleged substance of settlement discussions.”

The California AG accused the media conglomerate of misrepresented their discussions in these leaks and also “demonstrating a lack of good faith.”

Bonta’s statement, however, left the door open for future talks saying that his office is happy to meet the company’s executives as soon as “Paramount stops playing games and engages sincerely.”

Paramount has not publicly commented on the California Attorney General’s remarks.

Monday’s talks were not expected to bring about an immediate resolution in the case, but it was set to take place on the backdrop of California Gov. Gavin Newsom saying he would prefer a settlement amid Paramount’s threats to leave California.

Although Bonta’s statement didn’t specify what leaks he was talking about, the Wall Street Journal reported on Sunday night that Bonta was expected to ask Paramount to divest some cable networks and make a commitment to keeping its movie studio separate from Warner as part of the settlement. Citing an unnamed source, the Journal reported that lawyers from the company and the AG’s office met last week to discuss the agenda for Monday’s meeting. The report noted that Paramount is unlikely agree to either selling off its cash generating cable channels or keep Warner’s studio business separate. An industry source cited by Deadline in an earlier report said the the issue has turned into a game of “PR chicken” with Paramount CEO David Ellison believing they could force Bonta to back off “with threats and intimidation,” mainly the threat to leave California. The report noted that the states suing to block the merger have raised doubts about the feasibility of one of the promises made by Ellison, of releasing 30 theatrical films every year.

What Have California Leaders Said About The Case?

At a press conference last week, California Gov. Gavin Newsom said he would prefer a settlement be reached in the multi-state lawsuit opposing Paramount’s acquisition of Warner “if it’s a good deal.” Newsom said the matter has to “worked through” and added that he was “concerned about the state, our reputation.” Newsom’s remarks come amid Paramount’s threat to leave the state and the Democratic Governor—who is considered one of the front runners for the Democratic Party’s presidential nomination in 2028—said he is taking the threat seriously. “I hope that doesn’t happen, and I’m of the belief that they don’t want to see that happen,” acknowledging that such a departure could have a major impact on Hollywood. Xavier Beccera, the Democratic candidate for this year’s California Gubernatorial election and former California AG, also said he would prefer a settlement. “I hope it settles before court. It is easier to stand in a conference room and settle than it is to stand in a courtroom,” Beccera said during a Politico event earlier this month. Los Angeles Mayor Karen Bass has also come out in favor of a settlement.

Paramount’s $110 billion deal to acquire Warner Bros Discovery hit a major bump last month after a group of 12 Democratic states, including California, sued to block the merger. While announcing the suit, Bonta said the deal would result in “higher prices, lower quality, and less content for film and television.” Later that month, a federal judge temporarily paused the merger from going through, saying the states had raised “serious questions” about the deal’s impact. The ruling was a costly blow for the Ellison-led company, which is liable to pay a ticking fee of around $7 million per day or $650 million per quarter if the deal doesn’t close by the end of September. A few days later, Paramount said it had agreed to push back the merger to June 2027 or until five days after the judge makes a decision on the states-led case.

David Ellison Says Paramount-Warner Bros. Discovery Scrutiny Is About ‘Whether I Can Be Trusted’ With CNN (Forbes)

Paramount Suffers Major Early Blow In Merger Lawsuit—And Billion-Dollar Losses Could Lie Ahead (Forbes)