Paramount-Warner Bros. merger clears antitrust hurdle after states reach settlement

The $110 billion merger of Paramount Skydance and Warner Bros. Discovery cleared its biggest remaining legal obstacle on Monday when California Attorney General Rob Bonta, leading a coalition of 12 state attorneys general, announced a settlement resolving their antitrust lawsuit against the deal. The agreement, which still requires court approval, would create one of the largest media companies in the world — combining major film studios, cable channels, streaming services, and two major news organizations, CBS News and CNN, under a single corporate roof.

The states had sued Paramount and Warner Bros. Discovery in July, claiming the merger would create a 'media behemoth' that would 'inflict substantial harm' on the entertainment industry by lowering output and raising prices. A judge had paused the merger shortly after. The settlement, filed as a proposed consent decree, removes that pause and gives the deal complete clearance to proceed — though a federal judge must still sign off.

Let me be clear: This settlement is not a vote of support for this merger. 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.— Rob Bonta, California Attorney General

The consent decree's centerpiece is a five-year, court-enforceable commitment to film output and domestic production spending. The merged company must release at least 30 theatrical films per year in the first two years and 32 per year in the three years after that. At least 20 percent of those must be tentpole blockbusters with budgets of $50 million or more, released on at least 3,000 U.S. screens within the first month. At least four films per year must be independent productions. If the company misses those targets, it must divest Miramax Studios and pay $30 million per missed film, according to The Verge.

On production spending, the settlement requires the merged company to invest at least $300 million more annually in U.S. film production than the two companies spent combined in 2025 — totaling a minimum additional $1.5 billion over five years, according to the California Attorney General's office. A separate $47.5 million fund will go to workers displaced by the merger. The company is also prohibited from selling Paramount Studios or Warner Bros. lots in California for at least five years.

The settlement timing was not accidental. According to reporting by Oliver Darcy of Status, discussed on PBS NewsHour, Paramount Chairman and CEO David Ellison had been making increasingly serious threats to relocate production jobs from California to states like Tennessee or Texas. That prospect alarmed Governor Gavin Newsom and local officials, and pressure mounted on Bonta to settle rather than risk losing those jobs entirely. The deal also came just days before a 'ticking fee' was set to activate, which would have required Paramount to pay Warner Bros. Discovery shareholders 25 cents per share for each quarter the deal was delayed past September 30th — amounting to roughly $7 million per day, according to The Verge.

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.— David Ellison, Paramount Chairman & CEO

The Writers Guild of America also separately settled its own antitrust lawsuit against Paramount as part of the broader resolution, according to The Verge.

Major Hollywood unions expressed qualified support for the settlement. IATSE International President Matthew D. Loeb thanked Bonta 'for a job well done.' The Directors Guild of America said the agreement contains 'important binding and enforceable commitments that protect theatrical film and television markets and domestic film jobs,' while noting it intends to continue separate discussions with Paramount about domestic television production. SAG-AFTRA called the settlement terms 'the lowest standards that our employers must meet,' urging the company to exceed them.

Despite the union endorsements, analysts and media critics are raising pointed questions about whether the settlement's conditions are as strong as they appear. On PBS NewsHour, Darcy noted that the 30-films-per-year requirement contains a significant caveat: up to half of those films can be co-productions, meaning the merged company would only need to fully produce 15 films on its own to satisfy the requirement.

A lot of this can have a huge effect on the entertainment business. I think that people are looking at the settlement that Rob Bonta got and not super thrilled with it.— Oliver Darcy, Founder, Status News

The settlement's provisions for press independence at CBS News and CNN have drawn the sharpest criticism. The agreement requires the creation of an editorial independence board made up of five established journalists with at least 10 years of experience. But as Darcy explained, Paramount itself selects all five board members, the board reports directly to Paramount's chief compliance officer, and the settlement does not specify what powers the board has to remedy interference if it finds any. The board also does not need to be formed for 180 days after the deal closes, meaning Ellison's team could reshape CNN's editorial direction for roughly six months before the board is even constituted.

This board does not seem to have any real teeth.— Oliver Darcy, Founder, Status News

Bonta himself acknowledged at a press conference that he still has broader concerns. 'Broadly speaking, we believe further consolidation in markets that are central to American economic life doesn't serve the American economy, consumers, or competition well,' he said, according to PBS NewsHour. He framed the settlement as the best available outcome rather than an endorsement of the merger itself, pointing to the deal's contrast with the 2018 Disney-Fox acquisition, after which Fox's film output dropped.

Whatever the settlement's limits, the practical consequences of the merger itself are expected to be significant. Darcy predicted that layoffs will follow quickly as the two companies consolidate back-office functions — communications, publicity, human resources, and legal departments — and that the newly combined entity, which will carry billions of dollars in debt, will face ongoing pressure to cut costs well beyond the initial round of consolidations.

The merger had already received approval from competition authorities in nearly 70 jurisdictions worldwide, and the Trump administration signed off on the deal at the federal level. With the state attorneys general settlement now in place, the remaining step is final approval from a federal judge. The deal is expected to close in the near term.

Why it matters — The settlement clears the way for one of the largest media mergers in history, reshaping who controls Hollywood studios, streaming platforms, and two major national news organizations — with court-enforceable conditions that supporters say protect workers and output, but critics say leave consumers and press freedom with limited real recourse.

Sources differ on Effectiveness of the 30-films-per-year theatrical release requirement: The requirement is a meaningful, court-enforceable commitment that protects film output and is the 'opposite' of what happened after the Disney-Fox deal. (oag.ca.gov) vs Up to half the 30 films can be co-productions, meaning the company only needs to fully produce 15 on its own; critics are 'not super thrilled' with the result. (pbs.org)

Sources differ on Strength of the CBS News and CNN editorial independence board: The board is a meaningful safeguard composed of five established journalists with at least 10 years of experience. (theverge.com) vs The board has no specified enforcement powers, is selected entirely by Paramount, reports to Paramount's chief compliance officer, and does not need to be formed for 180 days — making it, in the words of journalist Kara Swisher, 'a fig leaf for management.' (pbs.org)

Reported by variety.com, pbs.org, oag.ca.gov, theverge.com, reuters.com