Paramount Settles Lawsuit With Dem AGs

Paramount Skydance reached a settlement Monday with Democratic state attorneys general seeking to block its acquisition of Warner Bros. Discovery, clearing a major obstacle to the Hollywood megamerger.

The agreement ends the antitrust challenge brought by California Attorney General Rob Bonta and 11 other state attorneys general, while the Writers Guild of America (WGA) also agreed to settle its separate lawsuit. The merger still requires final judicial approval.

“We’ve reached a settlement agreement with Paramount that includes court enforceable guardrails to resolve the antitrust issues at the center of our case, protect competition and consumer choice, and provide for the production of significantly more films and a minimum of $1.5 billion in additional investment in domestic film production,” Bonta posted on X.

“We are grateful to Attorney General Bonta and his fellow AGs, as well as the WGA, for engaging in good faith to find a path forward to a resolution that serves all parties, and to Governor Newsom for his support throughout this process,” Paramount CEO David Ellison said in a statement Monday.

The settlement requires Paramount to distribute at least 30 films in theaters each year and spend an additional $1.5 billion on U.S. film production over five years, according to the Associated Press. Paramount also agreed to measures intended to protect the editorial independence of CNN and CBS.

Paramount could face a $30 million penalty for each film it falls short of its annual theatrical-release commitment, according to Reuters.

The settlement ends a legal battle that pitted the Democratic attorneys general against the Trump administration’s Justice Department over whether the merger threatened competition.

The Justice Department cleared the acquisition in June after concluding the transaction was unlikely to harm competition or American consumers. The department said its review instead suggested the combined company would increase competition across the media and entertainment industry.

Bonta and the other attorneys general sued roughly a month later, alleging the combination would reduce competition in film distribution and cable television. A federal judge subsequently halted the merger while the states’ challenge proceeded.

The Daily Caller News Foundation reported Sept. 14 that a source close to Democratic New Jersey Gov. Mikie Sherrill said the governor’s team was not given advance notice before New Jersey Attorney General Jennifer Davenport joined the lawsuit.

The settlement would also allow Paramount to avoid late fees of roughly $7 million per day that were scheduled to begin Oct. 1 if the transaction remained unfinished.

Paramount announced its acquisition of Warner Bros. in February after outbidding Netflix. The deal would combine Paramount’s CBS, MTV and Paramount+ businesses with Warner Bros.’ HBO, CNN and extensive film and television operations.