States and Writers Guild Settle Suits, Clearing Path for Paramount-Warner Bros. Merger

A coalition of a dozen state attorneys general and the Writers Guild of America agreed Monday to settle their lawsuits challenging Paramount Skydance's acquisition of Warner Bros. Discovery, clearing the last major legal obstacle to a deal that combines two of Hollywood's oldest studios and is valued at roughly $81 billion in equity, or about $110 billion including assumed debt.

California Attorney General Rob Bonta led the states, joined by New York, Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, Oregon and Washington, in a suit filed in July that argued the merger would let a combined company suppress competition for film and television talent and squeeze cable distributors. Under the settlement, announced in a statement from Bonta's office, Paramount agreed to a five-year, court-enforceable commitment to release at least 30 films a year for two years and 32 a year for the following three, backed by a $1.5 billion increase in domestic production spending over five years.

Money for Displaced Workers, a Watchdog for the Newsrooms

The company also committed $47.5 million to a fund for entertainment workers displaced by the merger and agreed to negotiate licensing fees for Paramount's and Warner Bros.' cable channels separately, a provision intended to limit the combined company's leverage over distributors. New York Attorney General Letitia James, whose office detailed the terms in a press release on the agreement, said the states secured "critical protections for entertainment industry workers" alongside a new independent editorial-oversight board for CBS News and CNN meant to guard against political interference in the merged company's journalism.

Connecticut Attorney General William Tong, who joined the coalition, said federal antitrust regulators' unwillingness to challenge the deal had left states "with one arm tied behind our backs," while Bonta cautioned that the settlement "is not a vote of support for the merger" but a resolution of the specific competitive harms his office had identified.

Writers Guild Settles Separately

The Writers Guild of America, which sued separately in July arguing the deal would let Paramount suppress writers' wages and reduce employment, also dropped its case Monday. Paramount agreed to a five-year prohibition on writer layoffs at CBS News and a $17.5 million payment to the Guild's health fund plus its attorneys' fees. "We continue to believe the merger will cause damage to writers and the industry at large," the Guild said in its statement, adding that pursuing the antitrust case alone, without the states' backing, would have cost millions of dollars it could not justify spending.

Paramount disclosed the settlement in a filing with the Securities and Exchange Commission. Chief Executive David Ellison called it "complete clearance for this merger," telling employees "we aren't going anywhere. Our history is here and this is where our future is being built."

The settlement still requires a federal judge's final approval, and Paramount has pushed back its target closing date into early 2027. The company faces a contractual penalty of $7 million a day owed to Warner Bros. Discovery shareholders for every day the deal remains unclosed past September 30, adding pressure to finish the remaining paperwork quickly, according to reporting on the settlement's financial terms. If completed, the merger would unite CBS, CNN, Paramount+ and HBO Max under one owner, along with film libraries spanning "Top Gun" and the "Harry Potter" franchise.