Paramount settles lawsuit blocking $110 billion Warner Bros. merger

Paramount has reached a settlement with California and the 11 other states that sued to block its planned $110 billion acquisition of Warner Bros. Discovery. The settlement removes a major roadblock standing in the way of the massive media merger.

According to the proposed consent decree filed with the court, it includes requirements like minimum numbers of theatrical film releases over the next five years, starting with 30 in year one and two, and 32 in the following years, and a commitment to spend at least $300 million more on production in the US compared to what the companies spent in 2025. At least four of the films produced must be independent films, and at least 20 percent must be “tentpole” blockbuster movies with $50 million-plus budgets, and releases on a minimum of 3,000 US screens within the first month.

If Paramount doesn’t meet these film release requirements, it must divest Miramax Studios and pay $30 million per missed film. It also requires the merged company to keep offering a free streaming service, like Pluto TV, and includes a commitment not to sell Paramount Studios or Warner Bros. lots in California for at least five years.

The settlement has rules for the negotiations over cable channels owned by the combined company as well, in addition to requirements for a news editorial independence board “made up of five established journalists” with at least ten years of experience to ensure editorial independence at CBS and CNN. The Writers Guild of America also settled its antitrust lawsuit against Paramount.

At a press conference announcing the agreement, California AG Rob Bonta called the arrangement “the opposite” of the 2018 Disney-Fox deal, where Fox’s film output dropped afterward. “Let me be clear: This settlement is not a vote of support for this merger,” Bonta adds in a press release. “But we believe this settlement, which resolves our antitrust concerns in every market alleged in our case, protects competition and consumer choice, and puts workers’ needs, concerns, and futures first, is the best course of action.”

Paramount Chairman & CEO David Ellison:

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 to a resolution that serves all parties, and to Governor Newsom for his support throughout this process. Our shared aim was an outcome that best serves consumers, workers and — most importantly — the creative community so vital to the art of visual storytelling. We’re confident this agreement does exactly that, memorializing a series of commitments that include 30+ films annually and expanded U.S. film production to help revitalize our industry here at home.

Our goal has always been to build a stronger Hollywood — one with more stories told, greater choice for consumers and stronger competition. That vision was validated by unanimous approval from competition authorities in nearly 70 jurisdictions worldwide, who agreed this deal is pro-competitive, pro-consumer and pro-worker. Having now addressed the State AGs’ and WGA’s concerns, we have complete clearance for this merger and look forward to putting these commitments into action. Bringing Paramount and Warner Bros. Discovery together will build that stronger Hollywood, creating expanded opportunity for our people and even more great entertainment for audiences around the world.

The settlement comes just days before Paramount’s “ticking fee” was set to go into effect, which would require the entertainment giant to pay WBD shareholders 25 cents per share for each quarter the deal is delayed past September 30th. The fee would’ve cost Paramount about $7 million per day.

Though the Trump administration signed off on the $110 billion merger, California, along with Arizona, Colorado, New York, Washington, and others, sued Paramount and WBD in July over antitrust concerns. They claimed the megamerger would create a “media behemoth” that would “inflict substantial harm” on the entertainment industry. A judge granted the states’ request to pause the merger shortly after.

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