Paramount reaches deal with California, other states over Warner Bros. Discovery merger
The California’s attorney general’s office announced a settlement Monday resolving a 12-state legal challenge to Paramount Skydance’s $110 billion merger with Warner Bros.Discovery, clearing a key hurdle for the transaction.
The merger would join together two historic film studios (Paramount Pictures and Warner Bros.Pictures), two popular streaming platforms (Paramount+ and HBO Max) and two news organizations (CBS News and CNN) under the leadership of 43-year-old mogul David Ellison.The states opposing the deal, led by California Attorney General Rob Bonta, sued to block the merger on July 13, arguing in a 38-page complaint that it would “extinguish competition” in Hollywood.Paramount agreed to freeze the merger until either the antitrust challenge was resolved or June 1, 2027 — whichever came first.
Judge Araceli Martínez-Olguín of the U.S.District Court for the Northern District of California, who is presiding over the case, had scheduled an antitrust trial for early March.The terms of the settlement include a pledge by the company to release 30 films per year for the first two years of the deal, followed by 32 films in each of the following three years — or pay a fee for missing that target.
Paramount is also pledging to establish independent editorial boards overseeing the operations of CNN and CBS News.Bonta also said that the combined company would invest more than $1 billion in production and film releases in the United States.Shares of both Paramount SkyDance and Warner Bros.
Discovery soared more than 10% as reports of the settlement circulated Monday.The lawsuit challenging the deal was filed by Bonta and his fellow Democratic attorneys general from Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington.They argued that the transaction violated Section 7 of the Clayton Antitrust Act of 1914, a federal law that bars mergers likely to reduce competition.
The states said ...