Paramount and Warner Bros. Deal Reaches Settlement with California and 11 Other States
California and 11 other states settled their antitrust challenge to the Paramount-Skydance and Warner Bros. Discovery merger, imposing film-release and investment commitments, while the Writers Guild also reached a separate settlement.
California Attorney General Rob Bonta announced Monday that his office and 11 other states have settled a lawsuit aimed at blocking the $110 billion merger between Paramount-Skydance and Warner Bros. Discovery. The agreement requires the combined company to release a minimum of 30 films per year for the first two years, increasing to 32 films annually for the next three years, with a $30 million penalty per missed film payable to Hollywood union health and retirement funds. The settlement also obligates the merged entity to invest more than $1 billion in U.S. film production and to keep negotiations for Paramount and Warner basic-cable channels separate, preserving competition.
"We are grateful to Attorney General Bonta and his fellow AGs, as well as the WGA, for engaging in good faith to find a path forward that serves all parties," said David Ellison, head of the merged company.
The agreement includes the creation of independent editorial boards for CNN and CBS News, a $47.5 million workforce fund for training displaced workers, and a five-year prohibition on writer layoffs at CBS News Broadcast. The Writers Guild of America, which settled its own lawsuit with Paramount, secured a $17.5 million payment to its health fund and a commitment to protect its writers.
Paramount had previously frozen the merger pending the antitrust case, which a federal judge had scheduled for early March. Shares of both Paramount and Warner rose more than 10 percent after news of the settlement emerged.
The states had argued that the merger would reduce competition in theatrical film distribution, top-grossing movie releases, and basic-cable channel distribution, citing Section 7 of the Clayton Antitrust Act. Paramount disputed those claims, describing the challenge as weak.
The Justice Department and the European Commission have already cleared the deal, and major theater chains have expressed support, while some industry figures continue to oppose the consolidation.