California calls off Paramount settlement meeting as media giant eyes Tennessee for new headquarters

California Attorney General Rob Bonta scrapped Monday’s planned settlement talks with Paramount as the media giant weighs bolting the Golden State — with Tennessee reportedly emerging as its preferred landing spot.

Bonta pulled the plug late Sunday after accusing Paramount of leaking and mischaracterizing details from a preliminary meeting between the two sides on Friday. Bonta did not specify what information he believed Paramount had leaked, but his accusation came hours after the Wall Street Journal reported details of Friday’s discussions — including that he was expected to seek cable-channel divestitures and protections designed to keep Warner Bros.’ movie studio separate from Paramount Pictures.

The collapse of Monday’s sit-down comes as Paramount has indicated it could ditch California if the legal standoff isn’t resolved soon — with Tennessee emerging as the company’s preferred destination for a new home, according to the Wall Street Journal. The Post also reported that Ellison has been eyeing a prospective movie and television studio in Austin, Texas, where Paramount and its partners have been in advanced negotiations over a potential facility.

Monday’s session was intended only to test whether there was room for further talks, rather than to hammer out a deal. Still, the planned talks had offered a potential path toward resolving an increasingly bitter showdown that has put Bonta at odds with Paramount CEO David Ellison — and drawn pressure from California Gov. Gavin Newsom and Los Angeles Mayor Karen Bass to find a solution.

Among the concessions Bonta planned to raise were cable-network divestitures and restrictions designed to preserve Warner Bros. as a distinct movie operation, the Journal reported. Bonta and Ellison had been scheduled to meet Monday after lawyers for the two sides met Friday to establish an agenda, according to the Journal. Bonta has insisted that any agreement include structural remedies to address his antitrust concerns. But Ellison is unwilling to accept restrictions that would leave him with little control over Warner Bros., a person familiar with his thinking told the Journal.

Paramount has instead pointed to commitments such as producing 30 theatrical releases a year. So far, however, it has resisted concessions involving divestitures or controls on how the businesses would be run, the Journal reported.

California and 11 other states sued last month to stop the tie-up, arguing that combining Paramount and Warner Bros. would reduce competition in theatrical movie distribution and basic cable programming. The Justice Department cleared the transaction in June without suing to block it. Outside the US, Paramount has already secured regulatory clearance across major jurisdictions including Europe, Britain and China.

The clock is increasingly costly for Ellison. Under the merger agreement, Paramount must begin making additional payments to Warner Bros. shareholders if the transaction has not closed by Oct. 1.