Paramount settles with states; clears path for $110B Warner Bros merger

Paramount Skydance Corp. has reached a settlement with California and three other states that had sued to block its hostile takeover bid for Warner Bros. Discovery. The deal, which is expected to be announced later today, clears the way for a $108.4‑billion merger that would combine two of Hollywood’s biggest studios, their flagship streaming services and major cable‑TV portfolios.

Negotiations concluded over the weekend after four states—Massachusetts, New York, Connecticut and Minnesota—agreed to drop their objections once California, the lead plaintiff, consented to the terms. A source familiar with the confidential talks said the states’ lawyers worked all night to craft an agreement that would satisfy the concerns raised in the lawsuits.

Under the settlement, Paramount would face a financial penalty if it fails to deliver on a promise to release 30 theatrical releases per year. Bloomberg reports that Paramount would pay $30 million for each film that falls short of that target, and could be required to divest its stake in Miramax if the goal is not met. The states also secured independent editorial boards for CBS and CNN as part of the deal.

If the final terms are approved, Paramount would be spared a daily late fee of $7 million that was set to begin on October 1. The settlement also removes the threat of a $7 million per day penalty, allowing the merger to proceed without additional financial burdens.

Paramount, the parent company of CBS, MTV and other media assets, announced in February that it had outbid Netflix for the acquisition. The $110 billion deal brings together two of the industry’s most storied film studios, their major subscription streaming services and some of the largest cable‑TV channel owners. Despite regulatory approval in almost 70 jurisdictions, 12 state attorneys general and the Writers Guild sued to block the merger, arguing it would stifle competition, raise consumer prices and lower writers’ wages.

California Attorney General Rob Bonta, who led the litigation, said he prefers structural changes such as an asset sale over behavioural remedies that are hard to enforce. Paramount has made recent offers to settle the suits, including commitments to release 30 films a year in theatres and to increase television‑show production.