California Attorney General Rob Bonta said that Paramount’s proposed merger with Warner Bros. Discovery is under active investigation and has not cleared regulatory review, raising immediate questions about whether the deal can proceed—even after Netflix exited the bidding.
“Paramount/Warner Bros. is not a done deal,” Bonta said to The Hollywood Reporter, confirming that the California Department of Justice is already examining the transaction. “These two Hollywood titans have not cleared regulatory scrutiny … and we intend to be vigorous in our review.”
His statement came hours after Netflix declined to raise its offer for Warner Bros. Discovery, leaving Paramount as the only remaining bidder.
The timing is significant. With Netflix stepping back, Paramount’s bid—led by CEO David Ellison and backed by Larry Ellison—now appears positioned to move forward at the board level.
However, Bonta’s intervention signals that regulatory approval, particularly at the state level, could become the primary barrier to closing.
If federal regulators approve the transaction, Paramount would still need to navigate state-level challenges. California is expected to play a central role in any legal opposition, given Warner Bros. Discovery’s deep ties to the state’s entertainment industry.
Bonta previously said any deal involving Warner Bros. must undergo a “full and robust review,” citing its economic and cultural impact.
Additional pressure is already building. A consumer lawsuit filed earlier this month in California federal court seeks to block the merger.
The current situation follows a prolonged and increasingly aggressive bidding war between Netflix and Paramount. Netflix initially secured a deal to acquire Warner Bros. Discovery’s studio and HBO Max streaming assets for $72 billion, or $27.75 per share. That agreement included both cash and stock, with later discussions around shifting to an all-cash structure to simplify the transaction.
Warner’s board consistently supported Netflix’s proposal, pointing to its scale, balance sheet, and lower execution risk. Netflix also agreed to a $5.8 billion termination fee if it failed to secure regulatory approval, while Warner would owe $2.8 billion if it exited the agreement.
Paramount, however, continued to pursue the company. It launched a hostile bid for the entire Warner Bros. Discovery business at $30 per share, revising its proposal multiple times.
That included a $40 billion equity guarantee from Larry Ellison and adjustments to match Netflix’s breakup fee. Paramount argued its all-cash structure provided greater immediate value and a clearer path to closing.
Warner rejected those offers, at one point calling elements of Paramount’s financing “illusory” and raising concerns about debt levels and operational risk. The company also warned that a Paramount deal could lead to workforce reductions tied to projected cost savings.