Twelve states and Hollywood screenwriters opposed Paramount’s acquisition of Warner Bros. Discovery have reached a settlement, clearing the path for the $81 billion US megamerger to be finalized, with additional conditions. The merger will bring together two of Hollywood’s most established studios, along with CBS, CNN, HBO Max, and Paramount+ streaming services, encompassing a vast library of popular titles like “Harry Potter” and “Top Gun.”
As part of the settlement disclosed by California Attorney General Rob Bonta, Paramount has committed to boosting domestic film production by investing at least an extra $1.5 billion US over the next five years and ensuring editorial independence in its news operations. The agreement is subject to final approval by a judge. Bonta emphasized that the goal was to safeguard people’s careers and livelihoods, rather than endorsing the merger itself.
Paramount CEO David Ellison expressed satisfaction with the settlement, describing it as the green light for the merger to proceed. He highlighted the potential for the combined entity to strengthen Hollywood, offering more opportunities for industry professionals and delivering enhanced entertainment for global audiences.
The coalition of states, including California and New York, had filed lawsuits in July to block the merger, alleging that it would stifle competition and limit choices for consumers, particularly in the movie theater and cable markets across the U.S. The Writers Guild of America, another opponent of the merger, also settled its case. The challenges were heading towards a full antitrust trial scheduled for March.
While the WGA maintained its concerns about the detrimental effects of the merger on writers and the industry, it acknowledged the necessity to continue independently pursuing its case. Paramount has agreed to refrain from laying off writers at CBS News for five years, contribute $17.5 million US to the WGA health fund, and cover legal fees from the litigation.
Paramount had previously postponed the merger to allow the legal challenges to progress. The company then sought a settlement, asserting that it had obtained regulatory approvals globally, including from the Trump administration’s Justice Department, and viewed the states’ lawsuit as the final hurdle.
Critics have raised alarms about the settlement, cautioning against further consolidation in an industry already dominated by a handful of major players. Alvaro Bedoya, a senior adviser at the American Economic Liberties Project, expressed concerns about potential job losses, increased costs for consumers, and the impact on small businesses resulting from the merger.