Paramount Reaches Settlement With States Over Warner Deal

Paramount Skydance has reached a settlement with California and 11 other states that sued to block its roughly $110 billion acquisition of Warner Bros. Discovery, removing one of the final major obstacles to closing the deal and averting a trial. The reported agreement includes independent editorial boards for CNN and CBS, a commitment to release 30 films theatrically each year with a $30 million penalty for every shortfall, and an additional $1.5 billion investment in film production over five years. Federal and international regulators have approved the transaction, while the states had argued it could reduce competition in theatrical films, cable television and labor markets; Paramount says the merger would strengthen its ability to compete with Netflix and Disney. The settlement still requires formal announcement and implementation, and Paramount faces pressure to complete the deal before Oct. 1, when a $7 million-per-day payment to Warner Bros. Discovery could begin. The Writers Guild of America continues a separate legal challenge over the deal’s potential effects on writers’ pay and working conditions.