Paramount has reached settlements with a coalition of 12 U.S. states and the Writers Guild of America over its proposed $81-billion US acquisition of Warner Bros. Discovery, removing major legal obstacles to one of Hollywood’s largest consolidation deals. The agreements still require final court approval.
The merger would bring together two major Hollywood studios alongside a vast collection of television and streaming assets, including CBS, CNN, HBO Max and Paramount+. Their combined libraries would include franchises and films ranging from Harry Potter to Top Gun. The states had sued in July, arguing that combining the companies could reduce competition and leave consumers with fewer choices, particularly in movie theatres and cable television.
Under the settlement announced by California Attorney General Rob Bonta, Paramount agreed to spend at least an additional $1.5 billion US on American film production over five years. The company also committed to establishing monitoring mechanisms intended to protect the editorial independence of its news operations. Bonta stressed that the settlement did not amount to an endorsement of the merger, saying he continued to oppose the combination while focusing the agreement on protecting workers and California’s entertainment industry.
The Writers Guild of America separately settled its antitrust challenge. According to the union, Paramount agreed to prohibit layoffs of writers at CBS News for five years and contribute $17.5 million US to the WGA health fund, in addition to covering certain legal fees. The WGA said it continues to believe the merger could harm writers and the broader entertainment industry but concluded that pursuing a complex antitrust trial without government partners would require millions of dollars.
Paramount CEO David Ellison described the settlements as providing “complete clearance” for the transaction and said combining Paramount and Warner Bros. Discovery would create more opportunities for employees and audiences. Paramount had previously said it had obtained the necessary regulatory clearances, including approval from the U.S. Justice Department, leaving the state litigation as a key remaining obstacle.
The proposed merger has nevertheless continued to face criticism from opponents of further media consolidation, who warn that combining major studios, television networks and streaming services could eventually affect employment, competition and consumer prices. With the lawsuits now settled, the transaction has moved significantly closer to completion, although the settlements must still receive final approval from the court.
