Paramount and California state officials are set to meet on Monday, August 24, to discuss a potential settlement path of the state's antitrust lawsuit aimed at blocking Paramount's acquisition of Warner Bros. Discovery, the New York Times reported on Saturday.

California Attorney General Rob Bonta and 11 other state attorneys general filed a lawsuit in July seeking to block the proposed $110 billion acquisition.

The deal would combine two of the most storied film studios in Paramount and Warner Bros., as well as streaming platforms Paramount+ and HBO Max. The potential deal would create the largest portfolio of TV networks in the US.

It was alleged that the deal would lessen competition in film distribution and cable television, harming theaters and pay TV distributors. States including New York, Arizona and Minnesota argued the deal would harm theaters and television distributors, raise prices for consumers and make wages less competitive for workers.

California Attorney General Rob Bonta had said in a release at the time announcing the lawsuit that the "unlawful merger" of these two entertainment behemoths would "lead to higher prices, lower quality, and less content for film and television, harming movie theaters, basic cable distributors, and ultimately, audiences on every sofa and movie theater seat in the US."

Pressure to settle the suit has grown in recent weeks as California Gov. Gavin Newsom, Los Angeles Mayor Karen Bass, and the Directors’ Guild of America, among others, have called for a settlement.

However, it is unclear if the latest discussions will lead to a settlement, the Times said, citing people familiar with the discussions.

On Thursday, California Attorney General Rob Bonta told CNBC that the acquisition would require “robust structural remedies” to reach a settlement in the antitrust case.

"[Paramount] wanted to talk about everything except for what this case is about. They want to talk about the streaming market, which we don’t allege in our complaint. They want to talk about CNN, which is not a focus of our complaint. They want to talk about the foreign regulators. We want to talk about the three markets that we set forth in our complaint, where we think there’s antitrust violation,” Bonta said on CNBC.

Paramount had previously agreed to delay the acquisition to as late as June 2027 due to the legal challenge, and a trial is set for March.

However, if the deal is delayed beyond September 30, Paramount will owe Warner Bros. Discovery shareholders a “ticking fee” that could amount to roughly $650 million in cash value every quarter, according to previous CNBC reporting.

Should the deal fall apart entirely, Paramount would owe WBD a $7 billion breakup fee, the report added.

In June, the antitrust division of the US Department of Justice cleared the proposed merger. European antitrust regulators also approved the deal in July.

However, US state officials, as well as the Writers Guild of America and several prominent Hollywood actors and actresses, have argued that the merger would not only reduce competition but result in job losses in the entertainment industry.

1. The talks are preliminary, and there is no assurance that they will lead to meaningful negotiations toward a settlement, the report said, adding that Paramount requested the meeting.

2. couldn't immediately verify the report. Paramount didn't immediately respond to a request for comment outside regular business hours.

3. The meeting, which will include senior executives and lawyers from each side, has been in the works for a little over a week, NYT added, citing one of the people.

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