Business21 September, 20263 min read
Paramount Reaches Deal With 12 States, Clearing Hurdle for Warner Bros. Discovery Merger
This article is an automated aggregation of coverage from news outlets. Our editorials offer in-depth analysis curated by the NewsCord team.
Settlement with 12 state attorneys general resolves antitrust suit blocking Paramount-Warner merger. Clears the way for the $110 billion merger between Paramount Skydance and Warner Bros. Discovery.
35 outlets told this the same way.
Settlement Clears Hurdle
Paramount reached an agreement with the attorneys general of 12 U.S. states to remove a major hurdle to completing Warner Bros. Discovery’s $111 billion acquisition, and the deal still required approval from the judge overseeing the case.
California Attorney General Rob Bonta said the agreement “resolves our antitrust concerns about the Warner Bros./Paramount merger,” and the pact ended the antitrust lawsuit filed in July by a coalition led by Bonta.
The agreement set a deadline pressure point, because starting October 1 Paramount would have begun accruing a daily penalty of $7 million for delays in closing the deal.
The agreement also required the combined company to keep Paramount studios in Los Angeles and Warner Bros. in Burbank for at least five years, while it committed to at least $300 million more in U.S. production than the two companies spent in 2025.
The agreement further required the company to distribute at least 30 films per year in the first two years, and it required the company to fund a fund dedicated to acquiring independent films with $5 million annually for a total of $25 million.
Judge Questions Terms
U.S. District Judge Araceli Martínez-Olguín held a virtual hearing to address “outstanding questions” about the proposed settlement, and she said the court “isn’t a rubber stamp of your agreement… I have some questions.”
Paula Blizzard, senior assistant attorney general for the antitrust section of the California Attorney General’s Office, told the judge that the process was an “arm’s length process,” and an attorney for Paramount concurred.
Martínez-Olguín assigned “homework” by asking the parties to submit replies to a letter submitted by Sen. Cory Booker (D-N.J.) by noon PT Monday, Sept. 28.
Booker urged the court to subject the proposed consent decree to an independent public-interest review, writing that the settlement “has reached the Court without a competitive impact statement, without a public comment period.”
Blizzard said the settlement’s five-year conditions were designed to address the states’ competition concerns without permanently blocking the merger, and she said, “If we block the merger, it would be forever.”
Business Commitments and Stakes
Paramount CEO David Ellison confirmed in an internal memo that the merger would be finalized in about two weeks, and the deal cleared the path for one of Hollywood’s biggest transactions in history. Morgan Stanley analysts Sean Diffley and Daniel Duran rated the result as clearly positive in a note dated September 22, but they warned that the hard part starts now with debt exceeding $77 billion. Morgan Stanley estimated net debt would close 2026 at $77.2 billion and barely drop to $75.1 billion in 2027, with interest expenses of $6.37 billion next year.
The agreement also required Paramount to keep Pluto TV free for five years, and it imposed a theatrical window that required mass distribution films to remain in theaters for at least 45 days. The agreement required the company to create a “News Editorial Independence Board” to define guiding principles of editorial independence for CNN and CBS News, and it required compliance to be supervised by an in-house director, an independent fiduciary, and a committee made up of representatives from five states.