Paramount Skydance reaches antitrust deal with states over Warner Bros. Discovery purchase

(CBS NEWS) — A group of U.S. states has reached a deal with Paramount Skydance that addresses antitrust concerns over the media and entertainment company’s $110 billion acquisition of Warner Bros. Discovery.

The deal with a coalition of 12 state attorneys general clears the way for Paramount, the parent company of CBS News, to complete its purchase of Warner Bros. Discovery.

“This settlement is not a vote of support for this merger,” said California Attorney General Rob Bonta at a press conference on Monday to announce the agreement.

Settlement conditions

The agreement includes pledges from Paramount to invest in domestic film production, Bonta said. The company will invest an additional $300 million per year in domestic production over five years, for a total of $1.5 billion in new investment, according to the proposed consent decree.

Paramount also pledged to produce 30 films in each of the first two years after the merger, and then 32 films a year for the following three years. Under the deal, at least 20 of the films must be wide-release movies in the first two years, and 21 must be wide-release films in the following three years. Wide-release films are those that are distributed to at least 2,000 movie theater screens, according to the consent decree.

If Paramount fails to meet those requirements, it will be required to sell the Miramax film studio, the document states.  For each film the company falls short of its annual release commitment, it must make a $30 million payment, with half going to the healthcare and retirement funds serving movie production unions. The rest would be divided between the Motion Picture & Television Fund and the National Association of Attorneys General Fund.

The agreement also bars Paramount from selling or closing the Paramount or Warner Bros. studio lots in the Los Angeles metropolitan area for at least five years.

Paramount has also agreed to establish an independent board to “ensure independent, objective fact-based reporting at CBS News and CNN,” Bonta said.

Additionally, the merged company must commit to separate negotiations for the distribution of basic cable channels owned by Paramount and Warner Bros. for a period of five years.

Under the settlement, a committee of five states will monitor and enforce Paramount’s compliance with the terms of the antitrust agreement.

The Department of Justice, Federal Communications Commission, and regulators in dozens of countries have already approved the deal.

“With both groups’ concerns now addressed, we have complete clearance for this merger and can move toward closing,” Paramount CEO David Ellison said in a statement on Monday, after the settlement announcement. “There’s still work ahead to get this deal across the finish line, but we’re excited to bring these two iconic companies together, as it means more opportunity for our creatives, production crews and employees across the business, and more great entertainment for audiences everywhere.”

Paramount clinched a deal for Warner Bros. earlier this year. But state prosecutors, led by Bonta, filed a lawsuit in July to block the transaction, alleging the merger would weaken competition in the movie industry and lead to higher prices for consumers.

The Writers Guild of America also filed suit in U.S. district court to block the merger, arguing that it would harm competition for writers and eliminate jobs in the industry.

Paramount has rejected allegations that buying Warner Bros. would reduce competition.

Deal unites major brands

Before Monday’s agreement, the U.S. District Court for the Northern District of California had scheduled a March 2027 trial to consider the states’ legal challenge to the merger.

Paramount, the parent company of CBS News, owns the Paramount studios and cable networks, including Comedy Central and Nickelodeon, as well as the Paramount+ streaming platform.

Warner Bros.’ movie studio has produced box-office hits such as the “Harry Potter” and “Lord of the Rings” franchises, and the company also owns cable networks including CNN, HBO Max, TBS and TNT.

Paramount’s stock price was largely flat at $10.15 after Bonta’s announcement, while Warner Bros. shares rose 11% to $30.80.