Paramount Skydance settles state lawsuits, clears path for $110 bn Warner Bros. Discovery merger

Paramount Skydance has resolved a lawsuit with a dozen U.S. states, removing a key obstacle to its proposed $110 bn merger with Warner Bros. Discovery. The settlement obliges the combined entity to release a minimum of 30 films each year, with a growing share of production required to occur in the United States—20% for the first two years, rising to over 30% in the subsequent three years. Failure to meet the quota could trigger the sale of Paramount’s 49% stake in Miramax.

California Attorney General Rob Bonta said the agreement is intended to boost domestic film production and safeguard jobs, adding that safeguards will prevent the use of low-budget or AI-generated content to meet the quota. He also noted that an independent monitor will be appointed to ensure compliance.

Paramount chief executive David Ellison welcomed the settlement, stating that concerns raised by state attorneys general and the Writers Guild of America have been addressed and that the company now has “complete clearance for this merger.” The Writers Guild, however, maintained that the deal could still harm writers and the broader industry, and it settled its own lawsuit after determining it could not continue the fight without government assistance.

As part of the agreement, Paramount will contribute $17.5 million to the WGA health fund, cover the guild’s legal fees and agree not to lay off writers at CBS News Broadcast for five years. While the merged company plans to keep its headquarters in California, that commitment is not codified in the settlement.