UPDATE: The terms of the settlement have now been revealed by The Hollywood Reporter, with the combined Paramount-Warner Bros. company required to release at least thirty films annually for the first two years and thirty-two annually for the following three, while spending an additional $1.5 billion on U.S. film production over five years. The agreement also guarantees theatrical windows of at least 45 days, requires Paramount and Warner Bros. cable channels to negotiate carriage deals separately and prevents the company from selling or closing either studio lot during the agreement. The settlement does not require the sale of CNN or other cable channels, but it establishes a five-member News Editorial Independence Board for the combined company’s news operations.
Paramount Skydance and a group of state attorneys general have reached a settlement in the antitrust lawsuit challenging the company’s $111 billion acquisition of Warner Bros. Discovery, clearing a major obstacle for the merger. According to The Hollywood Reporter, the agreement comes after days of negotiations and is expected to be formally announced Monday.
The settlement clears Paramount to move forward with closing the deal, though specific terms, including any potential divestitures, have not yet been announced. The timing could also save Paramount from high additional costs.
The Hollywood Reporter noted that a roughly $7 million-per-day “ticking fee” was scheduled to begin October 1 if the acquisition had not closed. With the settlement reached, Paramount could avoid those payments if it completes the transaction within the coming days.
California Attorney General Rob Bonta and attorneys general from eleven other states had sued to block the merger over antitrust concerns. The states argued that combining Paramount and Warner Bros. Discovery could give the new company too much control over theatrical film distribution and basic cable television.
The Writers Guild of America later filed its own lawsuit, arguing that the merger could reduce competition for film and television programming, suppress wages and worsen working conditions for writers. Consumers had also separately challenged the acquisition.
Paramount has maintained that the merger would increase competition and allow the combined company to better compete with larger technology and streaming companies. CEO David Ellison has also pledged that the studio will release at least thirty movies theatrically each year.
Before the settlement, Paramount had warned that it could leave California if the dispute continued beyond October 1. Texas and Tennessee had both expressed interest in attracting the company. Bonta publicly characterized Paramount’s relocation threat as “blackmail,” while Paramount kept pushing to move the merger forward.
The federal Justice Department’s Antitrust Division had previously cleared the acquisition without requiring divestitures or other concessions. The state lawsuit remained one of the biggest barriers to completing the transaction.
While the settlement now gives Paramount a path to close its Warner Bros. Discovery acquisition, the exact conditions of the agreement remain to be announced.
