Paramount Skydance reached settlements on Monday with 12 US states and the Writers Guild of America over its planned acquisition of Warner Bros. Discovery, removing what the Associated Press described as the last major obstacle to the combination. The states' agreement remains subject to a judge's approval. AP values the equity purchase at about $81 billion and the transaction at roughly $111 billion when debt is included.
California Attorney General Rob Bonta led the coalition, which sued in July on grounds that combining two of Hollywood's five major film distributors could reduce output, weaken competition and raise prices. The merged group would unite film studios, the CBS and CNN television networks, the HBO Max and Paramount+ streaming services, and extensive entertainment libraries. Bonta said the settlement resolves the markets covered by the states' lawsuit but does not amount to support for the merger.
Under the five-year consent agreement, the combined company must release 30 films annually, including 20 wide releases, during the first two years. It must release 32 films, including 21 wide releases, in each of the following three years and distribute at least four independent films every year. A shortfall can trigger a required sale of Miramax and a $30 million payment for each missing film to union benefit funds and antitrust enforcement.
Paramount also committed to spend at least $1.5 billion more on US film production over five years than its 2025 baseline and to establish a $25 million fund to acquire independent films. A separate $47.5 million workforce fund will support training and career development for people displaced by the merger. The company must honor existing collective bargaining agreements and negotiate in good faith with unions.
Consumer and editorial safeguards require Paramount and Warner cable-channel licensing negotiations to remain separate for five years. The company must continue offering a free streaming service comparable to Pluto TV and establish an independent board to oversee editorial independence at CNN and CBS. An independent monitor will track compliance. California, New York and ten other states joined the settlement, while the Writers Guild ended its separate challenge after warning that the merger could still harm writers and the broader industry.
The agreement sharply improves Paramount's ability to complete a deal that would reshape global entertainment, but the court has yet to approve it. Supporters point to enforceable production and worker protections, while critics cited by Reuters argue that temporary behavioral commitments do not replace the competition lost when major studios combine. Paramount chief executive David Ellison said the settlement provides clearance for the transaction; the next decisive steps are judicial approval and closing the acquisition.
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