Paramount settles lawsuit blocking $110 billion Warner Bros. merger

Paramount has reached a settlement with California and eleven other states that had filed suit to block its planned $110 billion acquisition of Warner Bros. Discovery. The proposed consent decree, filed with the court, sets a range of conditions the merged company must meet in order to resolve the states' antitrust allegations and allow the merger to proceed. Under the decree, the combined studio must release a minimum number of theatrical films each year for the next five years: 30 films in each of the first two years and 32 films in each of years three through five. The agreement also requires the merged company to increase U.S. production spending by at least $300 million compared with what the two companies spent in 2025. Additional content requirements include producing at least four independent films and ensuring that at least 20% of releases are "tentpole" movies with budgets above $50 million and launches on a minimum of 3,000 U.S. screens within their first month. If Paramount fails to meet the film release targets, the consent decree requires divestiture of Miramax Studios and imposes a $30 million penalty for each missed film. The settlement also obliges the combined company to continue offering a free streaming service such as Pluto TV and prevents the sale of Paramount Studios or Warner Bros. lots in California for at least five years. The decree includes rules governing negotiations over cable channels the merged company would own. The settlement addresses editorial concerns as well: it mandates the creation of a news editorial independence board made up of five established journalists with at least ten years of experience to safeguard newsroom autonomy at CBS and CNN. Separately, the Writers Guild of America reached a settlement of its antitrust lawsuit against Paramount. California Attorney General Rob Bonta characterized the agreement as resolving the asserted antitrust issues and contrasted its commitments with post-merger output declines alleged after the 2018 Disney-Fox deal; he emphasized that the settlement is not an endorsement of the merger but a resolution that protects competition, consumer choice and workers. Paramount's chairman and CEO David Ellison praised the agreement as the result of negotiations with state attorneys general and the WGA, noting it includes the 30+ films-per-year and increased U.S. production commitments. The settlement came shortly before Paramount's "ticking fee" would have taken effect; that provision would have required Paramount to pay Warner Bros. Discovery shareholders 25 cents per share for each quarter the deal was delayed after September 30, a cost estimated at about $7 million per day. The companies had previously received approval from competition authorities in nearly 70 jurisdictions, but the multistate lawsuit filed in July had led a judge to pause the merger while the legal challenge proceeded.