Paramount Skydance has reached a settlement with California and 11 other states that had sued to block its proposed $110 billion acquisition of Warner Bros. Discovery, removing a significant antitrust obstacle in the United States. The deal, which could reshape Hollywood, still faces other legal challenges.
Key Settlement Terms
According to a source familiar with the matter, the settlement includes the establishment of independent editorial boards for CNN and CBS. Additionally, Paramount would face a $30 million penalty for each film shortfall against its commitment to release 30 movies annually. The agreement also helps Paramount avoid a $7 million daily fee owed to Warner Bros. shareholders for every day the transaction remains unfinished after September 30.
Background of the Lawsuit
A coalition of 12 state attorneys general, led by California Attorney General Rob Bonta, filed a lawsuit 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 resolves these concerns for the involved states, but the Writers Guild of America has separately sued to stop the deal, citing potential pay cuts and worsened working conditions for writers.
Global Regulatory Status
Antitrust regulators in the European Union and Britain have already cleared the acquisition. With the 12-state settlement, Paramount Skydance has cleared a major U.S. legal hurdle as it moves toward completing the merger. The proposed combination would bring together two of Hollywood’s biggest entertainment businesses amid ongoing industry transformation in film, television, and streaming.
Neither Paramount Skydance nor Warner Bros. Discovery immediately responded to requests for comment on the settlement.