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Paramount Skydance has reached a settlement with California and 11 other US states that had challenged its planned $110 billion acquisition of Warner Bros Discovery.
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The agreement removes a major legal hurdle for the merger, which would bring major film studios, television networks and streaming platforms under one company.
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Paramount has agreed to increase US film production, maintain annual theatrical release targets and create independent editorial oversight for CBS News and CNN.
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The Writers Guild of America has also settled its separate lawsuit, although the union said it still believes the merger could harm writers and the wider industry.
September 22, (THEWILL) – Paramount Skydance’s planned acquisition of Warner Bros Discovery has moved closer to completion after the company reached a settlement with California and 11 other US states.
The $110 billion deal has faced legal challenges since July, with the states arguing that combining the two companies could reduce competition across film, television, streaming and news.
The Writers Guild of America also filed a separate lawsuit over concerns about the effect of the deal on writers.
Under the settlement announced on Monday, September 21, Paramount agreed to several conditions covering film production, theatrical releases and news operations.
The company must release at least 30 theatrical films each year for the first two years, increasing to 32 films annually for the following three years.
At least four films each year must be independent productions, while at least 20 per cent of the annual slate must be major blockbuster releases.
Paramount will also spend at least $300 million more each year on film production in the US, compared with its 2025 level. That amounts to a minimum commitment of $1.5 billion over five years.
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The company could face a $30 million penalty for each film it fails to release under the agreed annual target.
The settlement also includes measures covering Paramount’s news businesses. An independent editorial board will be established to protect editorial independence at CBS News and CNN.
Paramount has further agreed to maintain the physical studio lots of both companies and honour existing collective bargaining agreements.
The Writers Guild of America separately settled its lawsuit against Paramount. Under the agreement, Paramount will pay $17.5 million into the guild’s health fund, cover legal fees and prohibit writer layoffs at CBS News for five years.
The guild, however, said it still believes the merger could hurt writers and the wider industry.
The proposed deal would bring together major entertainment businesses including Paramount Pictures, Warner Bros Pictures, CBS, CNN, Paramount+ and HBO Max under one company.
It would also combine their large film and television libraries, including franchises such as ‘Harry Potter’ and ‘Top Gun’.
Paramount CEO David Ellison welcomed the settlement and said the company now had “complete clearance” for the merger. California Attorney General Rob Bonta, who led the states’ legal challenge, said the settlement should not be seen as support for the transaction.
The agreement clears a major legal obstacle, but the merger still requires final approval from a federal judge before it can be completed.
The deal has already received antitrust approval from other major jurisdictions, including the European Union and the United Kingdom.
Evi-Ben Ezaga is an entertainment and society writer with a passion for stories that explore culture, people, and the stories shaping society today.
