Economy & Markets

Paramount Skydance has reached a settlement with a coalition of twelve state attorneys general led by California's Rob Bonta, removing the final major legal obstacle to its $110 billion merger with Warner Bros. Warner Bros Discovery. The agreement resolves an antitrust lawsuit filed in July that sought to block the deal on grounds that it would reduce competition in film distribution and basic cable television. By settling, Paramount avoids a trial originally scheduled for March 2027 and escapes a looming $7 million daily "ticking fee" that was set to begin accruing on October 1, potentially saving the company hundreds of millions in additional costs. Under the terms of the settlement, Paramount has agreed to significant operational commitments designed to protect domestic jobs and creative output. The studio must increase its annual domestic production spending by at least $300 million and ensure that 20% of its films are produced domestically in the first two years post-merger, rising to 30% in the subsequent three years. Additionally, Paramount is mandated to release a minimum of 30 theatrical films annually, with strict guardrails against AI-generated content and penalties including potential divestiture of its stake in Miramax if targets are missed. The company also agreed to maintain editorial independence for CBS News and CNN through a new board structure. While Paramount CEO David Ellison hailed the resolution as a victory for consumers and the creative community, critics and regulators maintained a skeptical stance. Attorney General Bonta explicitly stated that the settlement does not constitute support for the merger itself, arguing that further consolidation generally harms the American economy. The Writers Guild of America (WGA), which had previously sued alongside the states, settled its claims after receiving financial contributions to its health fund and guarantees against writer layoffs, though it continues to oppose the broader transaction. The combined entity now expects to close the deal within approximately two weeks