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Paramount Skydance has settled an antitrust lawsuit brought by California and 11 other states. The agreement removes a major obstacle facing the proposed Paramount Warner Bros. merger.
The settlement announced Monday, Sept. 21, still requires final court approval. However, it could allow Paramount to complete the acquisition before a costly deadline at the end of September.
Paramount Warner Bros. Merger Includes New Commitments
Paramount agreed to increase film production in the United States under the settlement. The company will spend at least $300 million more annually on domestic productions for five years.
The combined company must release 30 movies during each of the first two years after the deal closes. That requirement will increase to 32 films annually for the following three years.
At least four releases each year must be independent films. In addition, at least 20% of the annual slate must be blockbuster productions, according to reports.
The settlement also includes requirements involving movie theaters, film licensing and cable distribution. These measures seek to preserve competition as two major Hollywood studios combine their operations.
Independent Oversight Planned for CNN and CBS
Paramount will establish an editorial independence board for CNN and CBS. The board will monitor efforts to protect the news organizations from improper business or political interference.
Newsroom independence became a central concern during negotiations. The merger would place CNN and CBS News under the same corporate owner.
The settlement provides court-enforceable requirements for Paramount, according to California Attorney General Rob Bonta. However, Bonta said the agreement should not be viewed as state support for the merger.
Paramount CEO David Ellison said the settlement marked complete clearance for the transaction. The company previously secured regulatory approvals in nearly 70 countries.
The U.S. Department of Justice closed its investigation in June. Federal officials concluded that the acquisition was unlikely to harm competition or consumers.
States Raised Competition Concerns
The coalition sued in July to stop the transaction. State officials argued that the deal could reduce competition in film distribution, blockbuster releases and cable television licensing.
A federal court later paused the merger while the lawsuit moved forward. Paramount and Warner Bros. agreed to delay closing until June 2027 or until the court resolved the case.
The Writers Guild of America also challenged the deal. The union argued that consolidation could lower writers’ pay and reduce employment opportunities.
Reuters reported that Paramount also reached a separate settlement with the union. That agreement includes a $17.5 million health care fund and protections for CNN and CBS employees.
Deal Would Reshape the Entertainment Industry
The transaction carries an equity value of about $81 billion and a total value of approximately $110 billion when debt is included. It would unite Paramount Pictures and Warner Bros., along with major television and streaming properties.
The combined company would control CBS, CNN, HBO, Discovery Channel, Paramount+ and HBO Max. Its entertainment catalog would include franchises ranging from “Harry Potter” to “Top Gun.”
Paramount could face a fee of about $7 million per day if the transaction remains unfinished after Sept. 30. Final court approval of the settlement could help the company avoid those additional costs.
The deal would create one of the world’s largest media companies. Viewers, theater operators and entertainment workers will now watch how Paramount fulfills its production and editorial commitments.