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Paramount and a coalition of state attorneys general spent the weekend negotiating potential settlement terms that could clear the way for its $81 billion merger with Warner Bros. Discovery, according to people familiar with the discussions cited by the Wall Street Journal and Bloomberg.
Among the terms under discussion is a $1.5 billion investment by Paramount in production in California, the Journal reported.
Paramount had previously said it could move production out of the state if an ongoing antitrust suit over the merger went to trial, with company executives privately discussing logistics for such a move as early as October.
The talks also include a possible sale of some of the company's cable channels, with one source naming Comedy Central as a candidate given its broad reach.
Divesting a sufficient number of channels could serve as a structural remedy to the cable-related portion of the antitrust case by reducing the combined company's share of the pay-TV market.
On the film side, the two parties are discussing an enforceable mechanism to guarantee Paramount's pledge of 30 films per year, a commitment previously made by chief executive David Ellison. Bloomberg reported the mechanism could include a penalty of $30 million per film if the guarantee is not met.
The discussions also include keeping the merged company's film studios operationally separate, including maintaining distinct development, marketing and distribution teams.
Production commitments are expected to be part of any settlement, including maintaining both companies' studio lots in Los Angeles. It remains unclear whether production guarantees would apply only to California, nationwide, or some combination of the two.
CNN has emerged as a separate point of discussion. Executives inside and outside the company, including Ari Emanuel, have proposed a CNN oversight board intended to preserve editorial independence for the news network.
New York Attorney General Letitia James and Connecticut Attorney General William Tong are reported to be particularly focused on the CNN provision, with James's office noting the network's substantial presence in New York.
California Attorney General Rob Bonta is leading the coalition of state attorneys general involved in the talks.
Even if California and Paramount reach a preliminary agreement, any state that declines to accept the terms, or opposition from the Writers Guild of America, could complicate the settlement process.
The talks may not progress on Monday, which coincides with the Yom Kippur holiday.
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