California Attorney General Rob Bonta announced a settlement on Monday in the antitrust case over Paramount Skydance’s proposed $111 billion acquisition of Warner Bros. Discovery, though divisions remain within the 12-state coalition that brought the challenge.
At a press conference in Los Angeles, Bonta said the agreement did not amount to an endorsement of the transaction. Paramount has accepted commitments on theatrical film releases, domestic production, cable-channel negotiations, worker training and the editorial independence of CBS News and CNN. A federal judge must still approve the agreement.
At least two other state attorneys general have pressed for stronger measures before agreeing to any settlement. New York Attorney General Letitia James and Connecticut Attorney General William Tong have signalled dissatisfaction with the proposed terms. Some attorneys general left the talks deeply disappointed, having sought more extensive concessions from the companies.
Bonta led the litigation for the coalition, which also includes Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington. The states argued that the merger would breach antitrust law by giving the combined company excessive control over basic cable television and theatrical film distribution.
The coalition alleged that consumers could face higher prices, fewer theatrical releases and less variety and quality in programming. A California judge found that the merger would likely violate antitrust laws, increasing pressure on Paramount and Warner Bros. Discovery to reach terms with the states.
Under the settlement, Paramount has agreed to put 30 films a year into theatres for five years. The court order will require increased film output during that period, with over 100 films receiving wide releases on at least 2000 screens nationally and concurrently.
Paramount has also committed a minimum of an additional $1.5 billion to domestic film production over five years, measured from 2025 U.S. spending levels. The requirement is designed to preserve a defined level of production while the combined company reshapes its operations.
The agreement sets a steep consequence for falling short of the annual release requirements. Paramount would have to divest Miramax Studios and pay $30 million for each missed film to various union healthcare and retirement trust funds and other entities. The brief does not set out how those payments would be divided.
The companies also agreed to keep negotiations for Paramount’s basic cable channels separate from negotiations for Warner Bros. Discovery’s basic cable channels for five years. This condition addresses one of the states’ central concerns: that a combined owner could gain greater leverage in discussions involving basic cable television.
A $47.5 million Workforce Fund will support training and career development for displaced workers over five years. The merged company will also create a fund to buy independent films, contributing $5 million a year for a total of $25 million.
Paramount further committed to “establish a news editorial independence board to support CBS News' and CNN's continued editorial independence” and to “ensure independent, objective, fact-based reporting”. The settlement materials described the commitment, though the proposed board’s composition and detailed mandate have yet to be specified.
The talks continued on Sunday without a resolution by the end of the day. The parties had been expected to pause negotiations on Monday for the Yom Kippur holiday, before Bonta announced the settlement.
Time has been a significant factor for the companies. A $7 million-per-day ticking fee is due to begin on October 1. The settlement allows Paramount to avoid the charge if the transaction closes within approximately 10 days. Paramount and Warner expect the deal to take effect in early October, provided it receives the required federal judicial approval.
The agreement could therefore avert a trial scheduled for the following year and remove a growing cost from the transaction. It does not, however, settle the political disagreement among the attorneys general. It remains unclear whether all 12 will ultimately approve the terms, or whether further concessions will be sought before the court considers the agreement.
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