Paramount, Warner Bros. Merger To Advance With State AGs Settlement
(RTTNews) - The proposed merger between Paramount Skydance Corp. and Warner Bros. Discovery, Inc. has cleared a key hurdle and is advancing after the California-Led coalition of 12 Attorneys General reached a settlement resolving the states' lawsuit over antitrust and competition issues.
The settlement by the California Attorney General Rob Bonta- led coalition with Paramount resolves antitrust concerns. It also protects the livelihoods of Hollywood workers and guarantees massive investments in domestic film production and provides enforceable guardrails to help keep cable prices competitive.
Shares of Warner Bros jumped Monday following the news, and closed trading 10.8% higher at $30.80, while Paramount fell 2.94% to close at $9.91.
In the overnight activity on the Nasdaq, Warner Bros is gaining 0.10%, and Paramount is gaining 1.82%.
Earlier in the day, Wall Street Journal had reported about advanced settlement talks between the parties.
The settlement, pending approval by the court, includes a five-year court enforceable commitment to increase film output, and a minimum of an additional $1.5 billion commitment to bolster domestic film production. The company also agreed to a $47.5 million fund for workers who are impacted by the merger, and restrictions on how the company handles cable negotiations to help keep prices competitive.
It was in February 2026 that Paramount announced its definitive merger agreement to acquire Warner Bros. in an all-cash transaction valued at $81 billion in equity and $110 billion in enterprise value. The deal is expected to position Paramount as a premier global media and entertainment powerhouse.
In mid-July, the coalition of attorneys general filed the lawsuit in the U.S. District for the Northern District of California to challenge the merger. They argued the deal was illegal, likely to lessen competition, and threatened viewers with higher prices. They also alleged substantial harm on movie theaters, basic cable distributors and, ultimately, audiences across the United States.
In a statement, California Attorney General Rob Bonta now said, "Let me be clear: This settlement is not a vote of support for this merger. But we believe this settlement, which resolves our antitrust concerns in every market alleged in our case, protects competition and consumer choice, and puts workers' needs, concerns, and futures first, is the best course of action."
Under the settlement, Paramount has agreed to a five-year term, where the merged company will commit to release 30 films a year — including 20 wide releases — in the first two years; and 32 films a year — with 21 wide releases — in years three, four, and five.
The firm also commits to release at least four independent films in each year of the commitment period.
If film output requirement in any year is not met, the company will be required to divest Miramax Studios and must pay $30 million per missed film toward the healthcare and retirement trust funds. These are funds associated with the Writers Guild of America, International Alliance of Theatrical Stage Employees, Directors Guild of America, International Brotherhood of Teamsters and other unions, and the National Association of Attorneys General for more antitrust enforcement.
Further, Paramount has agreed to bolster the merged company's U.S. film production and spend an at least additional $1.5 billion over five years over its 2025 U.S. spending levels.
In the next legislative session, Attorney General Bonta will be working closely with the legislature to uncap the California Film and Television Tax Credit in order to strengthen the state's competitiveness, encourage productions to spend and hire more in the state, and support jobs and businesses.
The merged company will form and operate a fund for purchasing independent films and will make an annual contribution of $5 million per year, for a total of $25 million.
In addition, the merged company will commit $47.5 million in a Workforce Fund over five years for training and career development for workers who are displaced by the merger.
Further, for five years, the merged company must conduct negotiations for Paramount basic cable channels independently from negotiations for Warner Bros. basic cable channels. This is expected to preserve the existing competitive dynamic between the companies.
The company also agreed to appointment of an independent monitor to oversee its compliance with this agreement.
Directors Guild of America National Executive Director Russell Hollander said they intend to continue discussions with Paramount regarding domestic television production, with a focus on ensuring a competitive and robust marketplace that protects jobs.
In securing the settlement, Attorney General Bonta leads the attorneys general of Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington.
