Twelve states and screenwriters from Hollywood who were opposing Paramount’s acquisition of Warner Bros. Discovery have reached a settlement, clearing the path for the $81 billion US megamerger to proceed with some additional commitments. The merger will bring together two long-standing Hollywood studios, prominent TV networks like CBS and CNN, and popular streaming services HBO Max and Paramount+. It will also combine vast libraries of content, including iconic titles such as “Harry Potter” and “Top Gun.”
As part of the agreement announced by California Attorney General Rob Bonta, Paramount has agreed to boost domestic film production by investing at least an extra $1.5 billion US in U.S. film projects over the next five years. Additionally, the company will implement oversight to ensure the editorial independence of its news operations.
The settlement is still pending final approval from a judge. Bonta emphasized that the agreement aims to safeguard individuals’ careers, livelihoods, and families in California, clarifying that it does not signify endorsement of the merger. Paramount CEO David Ellison expressed satisfaction with the settlement, describing it as full clearance for the merger, which he believes will strengthen Hollywood and offer greater opportunities for industry professionals while delivering enhanced entertainment to global audiences.
The coalition of states, including influential entertainment hubs like California and New York, had filed lawsuits in July to block the merger, citing concerns that the combination of Paramount and Warner Bros. would stifle competition and limit choices for consumers, particularly those in the movie theater and cable sectors across the U.S. The Writers Guild of America also raised objections and was set for an antitrust trial scheduled for March before reaching a settlement.
Despite maintaining reservations about the merger’s impact on writers and the industry, the Writers Guild of America acknowledged the settlement with Paramount. The agreement includes provisions to prevent writer layoffs at CBS News for five years and a $17.5 million US payment to the WGA’s health fund, along with covering legal expenses from the litigation.
Paramount had previously postponed its transaction to allow legal challenges to progress and subsequently sought a resolution, highlighting its compliance with regulatory approvals globally, including clearance from the Justice Department during the Trump administration. The company viewed the states’ lawsuit as the final hurdle to overcome.
As news of the states’ agreement with Paramount circulated, critics voiced concerns over the deal and cautioned against further consolidation in an industry already dominated by a handful of major entities. Alvaro Bedoya, a senior adviser at the American Economic Liberties Project and former FTC commissioner, criticized the settlement, predicting job losses, contract cancellations for small businesses, and potential cost increases for consumers in various regions.