Paramount Settles With 12 States, Clearing Path to Warner Bros. Takeover

Paramount Skydance has settled a lawsuit by a 12-state coalition of attorneys general, clearing the way for its roughly $110 billion takeover of Warner Bros. Discovery, according to CBS News and Al Jazeera. CBS News is owned by Paramount. The settlement, announced Monday, binds the combined company to film-production targets, protects Hollywood studio lots and creates independent oversight of the news operations at CBS and CNN.

The states, led by California, sued in July, arguing the merger would reduce competition in the movie industry and raise prices for consumers, CBS News and Al Jazeera reported. A trial had been scheduled for March 2027, CBS News said. The Justice Department, the Federal Communications Commission and regulators in dozens of countries had already approved the deal, according to CBS News.

Under the terms described by CBS News, Paramount must add $300 million a year in domestic production spending for five years, or $1.5 billion in all. It must release 30 films a year for the first two years and 32 a year for the following three, with at least 20 of the earlier films and 21 of the later ones getting wide releases on at least 2,000 screens. Each film short of the annual target triggers a $30 million payment, split among union health and retirement funds, the Motion Picture & Television Fund and a fund of the National Association of Attorneys General. If Paramount repeatedly misses, it must sell the Miramax studio. Al Jazeera, citing Reuters, also reported the $30 million figure.

Paramount may not sell or close its Paramount or Warner Bros. lots in the Los Angeles area for at least five years, and the two companies must negotiate distribution of their basic cable channels separately for five years, CBS News reported. A five-state committee will monitor compliance.

Both outlets reported the news provisions. Paramount agreed to set up an independent board to oversee fact-based reporting at CBS News and CNN, which Al Jazeera said is meant to address concerns about political pressure on coverage. Al Jazeera, citing Bloomberg, reported that the Writers Guild of America, which had also sued, settled over the weekend, and that an unnamed source said the terms include concessions for workers and protections for journalists at the two networks, including headcount requirements.

California Attorney General Rob Bonta said, “This settlement is not a vote of support for this merger,” according to CBS News. Paramount chief executive David Ellison said the company now has complete clearance and can move toward closing, though work remains. Al Jazeera noted that Paramount Skydance is owned by Larry Ellison, an ally of President Trump, and run by his son.

Critics questioned the newsroom piece. Seth Stern of the Freedom of the Press Foundation called an independent editorial board for CNN and CBS “a weak half-measure” and raised First Amendment concerns about creating such a board through a government settlement, Al Jazeera reported. Paramount denies that the deal would reduce competition, CBS News reported.

Warner Bros. Discovery shares rose 11% on the news, to $30.80, according to CBS News and Al Jazeera. The settlement also lets Paramount avoid a $7 million daily fee owed to Warner Bros. shareholders for each day the deal fails to close after Sept. 30, Al Jazeera reported.