Paramount Skydance reached a settlement with California and 11 other states that sued to block its proposed USD 110 billion acquisition of Warner Bros. Discovery, removing a major US antitrust hurdle for a deal that could reshape Hollywood.
The settlement includes independent editorial boards for CNN and CBS, according to a source familiar with the matter. Paramount would also face a USD 30 million penalty for each film shortfall against its commitment to release 30 movies annually.
The agreement removes one of the biggest obstacles facing the proposed merger, which would bring two major Hollywood film studios, two streaming services and two large cable-news operations under one owner.
Paramount Skydance and Warner Bros. Discovery did not immediately respond to Reuters requests for comment on the settlement.
A coalition of 12 state attorneys general, led by California Attorney General Rob Bonta, sued in July to block the transaction. The states argued that the merger could reduce competition and create a media company with greater power to raise prices across movies and television.
The settlement also helps Paramount avoid a USD 7 million daily fee owed to Warner Bros shareholders for every day the transaction remains unfinished after September 30.
The proposed merger would combine two of Hollywood’s biggest entertainment businesses at a time when the industry continues to undergo major changes in film, television and streaming.
The Wall Street Journal previously reported that the parties discussed several possible concessions, including a USD 1.5 billion investment in production in the state, commitments involving studio lots and penalties linked to Paramount’s pledge to release 30 movies annually.
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The settlement does not resolve every challenge to the transaction. The Writers Guild of America separately sued to stop the deal, arguing that the merger could reduce pay and worsen working conditions for film and television writers.
Antitrust regulators in other jurisdictions, including the European Union and Britain, already cleared the acquisition. The agreement with the 12 states therefore removes a significant US legal hurdle as Paramount Skydance moves toward completing the USD 110 billion Warner Bros. Discovery deal.