Paramount, states settle antitrust challenge to $110 billion Warner Bros. Discovery merger

Paramount Skydance has reached a settlement with California and 11 other states that sued to block its $110 billion acquisition of Warner Bros. Discovery, removing a major legal obstacle to a combination that would bring Paramount Pictures, Warner Bros. Pictures, Paramount+, HBO Max, CBS News and CNN under one company.

The agreement includes commitments aimed at addressing concerns about film production and the independence of the combined company’s news operations.

Paramount will establish separate independent editorial boards overseeing CBS News and CNN, according to people familiar with the settlement. The company has also committed to releasing at least 30 theatrical films annually during the first two years following the merger and 32 films annually for the following three years.

The settlement includes a $30 million penalty for each film Paramount falls short of its annual theatrical release commitment, Reuters reported.

Paramount also agreed to invest more than $1 billion in U.S. production and film releases, according to the settlement details. The Los Angeles Times reported the company committed to spending $1.5 billion on film production in California over five years.

California Attorney General Rob Bonta led the coalition of attorneys general that sued in July 2026, arguing the combination would reduce competition in theatrical film distribution, anticipated blockbuster distribution and the market for basic cable channels sold to cable and satellite providers. The coalition also included Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington.

Paramount disputed those allegations, calling the lawsuit “wrong on both the facts and the law.”

The litigation had prevented Paramount from completing the transaction while the case proceeded. Under an earlier agreement reached in July 2026, the companies agreed not to close the merger until either a court resolved the states’ challenge or June 1, 2027, whichever came first. A federal antitrust trial had been scheduled for March 2027.

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The settlement eliminates that state-led challenge and brings Paramount closer to closing the transaction.

The Justice Department cleared the deal June 12, 2026, while the European Commission approved it July 21, 2026, subject to conditions that included divestment of a stake in United International Pictures and restrictions on certain European film distribution arrangements.

The Writers Guild of America remains separately opposed to the acquisition and has argued that further consolidation could reduce employment and opportunities for writers. Hollywood actors, writers and producers have also organized against the transaction, saying additional consolidation could hurt the creative industry.

Paramount has maintained that the transaction is lawful and would benefit consumers, creators and workers.