After a relentless pile-on, Warner Bros. Discovery finally caught a break this Friday. WBD shares jumped 3%, while Paramount ticked up 1.6%, driven by a Wall Street Journal report that California Governor Gavin Newsom is growing increasingly concerned about the state’s antitrust lawsuit aiming to block the studio’s mega-merger.

Here is the breakdown of the latest plot twist in the Hollywood merger saga:

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  The Governor’s Stance: Behind closed doors, Newsom has reportedly warned that blocking Paramount Skydance’s colossal $110 billion acquisition of Warner Bros. Discovery could deal a heavy blow to state employment.

  
  


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  The Push to Settle: Looking to protect jobs, the governor’s office is actively urging California Attorney General Rob Bonta to ditch the courtroom battle and find an out-of-court resolution.

  
  


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  The Legal Reality: Newsom doesn’t actually have a role in the litigation or authority over the attorney general. Bonta operates with independent power, meaning it remains entirely up in the air how much weight the governor’s pressure will actually carry.

  
  

This internal friction highlights a stark divide between two of California’s top elected officials. It comes on the heels of a coalition of 12 states suing to block the deal, which prompted a judge to temporarily halt the merger on July 23 to evaluate potential harm to consumers and the industry.

While Newsom—who is finishing his second term and widely anticipated to mount a 2028 presidential bid—lacks the direct power to yank the lawsuit, his vocal apprehension offers a much-needed glimmer of hope to investors betting on the merger’s survival.