Paramount Skydance has reportedly reached a settlement with California and several other states that sued to block its proposed $110 billion acquisition of Warner Bros. Discovery. Bloomberg reported the agreement on September 21, with Reuters subsequently confirming the development through its own coverage. The settlement removes one of the most significant remaining legal obstacles facing the transaction, although a separate lawsuit from the Writers Guild of America remains unresolved.
The states’ case was filed in July by California Attorney General Rob Bonta and a coalition of 11 other attorneys general. They argued that combining Paramount and Warner Bros. Discovery would reduce competition across film distribution and basic cable programming, potentially giving the merged company excessive control over major parts of the entertainment market. A federal court later paused the transaction while the legal challenge moved forward.
The proposed acquisition values Warner Bros. Discovery at an enterprise value of roughly $110 billion. Paramount agreed in February to pay $31 per WBD share in cash after Warner Bros. Discovery’s board determined the bid was superior to a competing transaction involving Netflix. The combination would bring together Paramount Pictures, Warner Bros., CBS, CNN, HBO, Max, Paramount+, DC, Discovery and several other major entertainment brands under one corporate group.
Terms of the new state settlement have not yet been fully disclosed publicly. Earlier negotiations reportedly involved a range of concessions, including a proposed $1.5 billion investment in California film and television production, commitments to maintain studio properties in the state and a pledge to produce approximately 30 films per year following the merger. Discussions had also reportedly covered potential cable-channel divestitures and measures intended to preserve editorial independence at CNN and CBS.
According to reports surrounding the talks, the settlement does not require Paramount to divest major cable assets as a condition of resolving the states’ challenge. That would represent a significant outcome for Paramount, which has sought to preserve the strategic value of Warner Bros. Discovery’s television and streaming businesses while completing the acquisition. Final settlement language and enforcement mechanisms, however, will determine exactly what commitments the company has accepted.
Paramount has already secured regulatory approval for the transaction across nearly 70 jurisdictions. That includes clearances from the U.S. Department of Justice, the European Commission, the United Kingdom, Australia, Canada, China, Brazil and other major markets. The company said in August that all regulatory conditions contained in its merger agreement had been satisfied, leaving the state litigation and the Writers Guild case as the principal remaining barriers.
The WGA filed its own federal antitrust lawsuit in July, arguing that the merger would reduce the number of major buyers of writing services and give the combined company greater power over employment opportunities and compensation. The guild has maintained that fewer competing studios could result in less production and fewer opportunities for writers. The reported settlement with the states does not automatically resolve that separate case.
Timing has become increasingly important for Paramount. Under its merger agreement, Warner Bros. Discovery shareholders begin receiving an additional payment if the transaction remains unfinished beyond September 30. Paramount has previously said the delay could cost it millions of dollars per day, creating pressure to resolve outstanding litigation before the end of the month.
The acquisition would rank among the largest transactions ever completed in the media industry and would substantially reshape the competitive landscape around streaming, film, television and gaming-related entertainment properties. Paramount has argued that greater scale is necessary to compete against companies including Netflix, Disney, Amazon and other technology-backed entertainment businesses, while opponents have warned that further consolidation could reduce competition.
The state settlement therefore represents a major step toward completing the Warner Bros. Discovery acquisition, but it does not mean the transaction has formally closed. Paramount must still clear the remaining legal issues, including the WGA lawsuit, before the companies can complete the merger.
