Paramount Skydance has reached settlements with a coalition of 12 U.S. states and the Writers Guild of America over its proposed acquisition of Warner Bros. Discovery, removing the principal legal obstacles that had prevented the companies from completing the transaction. The state agreement remains subject to court approval, but it would lift the no-close restrictions that had kept the deal on hold. The Writers Guild has separately agreed to settle its own antitrust lawsuit challenging the merger.
California Attorney General Rob Bonta led the coalition of states, which had argued that combining Paramount and Warner Bros. Discovery could reduce competition, lower film and television output and harm entertainment workers and consumers. Under the proposed settlement, Paramount will make a series of enforceable commitments covering theatrical releases, domestic production investment, cable negotiations, employment-related protections and the editorial independence of CNN and CBS News. The agreement does not require Paramount to divest Warner Bros. Discovery assets as a condition of proceeding.
One of the most significant commitments concerns theatrical film production. The combined company must release at least 30 films annually during the first two years covered by the agreement and 32 films per year during the following three years, with requirements encompassing both major releases and independently produced films. Paramount has also committed to increasing domestic film-production spending by at least $1.5 billion above 2025 levels over the five-year settlement period.
The agreement additionally creates a $47.5 million fund intended for workers affected by the merger and includes provisions aimed at supporting workforce development and collective bargaining obligations. Paramount must retain major studio facilities while the settlement is in effect and faces financial penalties if it fails to meet certain film-output requirements. Compliance will be overseen through independent monitoring mechanisms and a group of participating states.
Another part of the settlement addresses the television businesses that will come under the same corporate owner. Paramount and Warner Bros. Discovery will be required to negotiate fees for certain basic cable networks separately rather than packaging their channels together in a way that the states argued could increase bargaining power against distributors. The settlement also calls for an independent editorial oversight board covering CNN and CBS News, designed to provide additional protections for newsroom independence after the companies combine.
The Writers Guild of America had filed a separate federal lawsuit in July seeking to block the acquisition. The union argued that a combined Paramount and Warner Bros. Discovery would become an unusually powerful buyer of writing services, potentially reducing jobs, suppressing compensation and decreasing the amount of film and television programming produced. Following the states’ settlement, the WGA also agreed to resolve its case rather than continue trying to stop the transaction in court.
The legal settlements follow months of regulatory review around the acquisition. Paramount said in August that it had already obtained the regulatory clearances required under the merger agreement across nearly 70 jurisdictions, including approval from the U.S. Department of Justice, the European Union and the United Kingdom. That left the state attorneys general and WGA lawsuits as the final major barriers to closing.
The U.S. Department of Justice had concluded in June that its investigation did not find the transaction likely to harm competition in areas including streaming, linear television and theatrical film development and distribution. The states and WGA nevertheless pursued their own challenges, resulting in a court agreement that paused the merger while those cases proceeded. Paramount had warned that continued delays could trigger substantial daily payments to Warner Bros. Discovery shareholders under the terms of the transaction.
With both challenges now resolved in principle, Paramount CEO David Ellison has said the company expects the Warner Bros. Discovery transaction to close soon. The combination is valued at roughly $110 billion and would bring major entertainment assets including Warner Bros., HBO, CNN and Discovery networks under the same corporate group as Paramount Pictures, CBS and Paramount+. Court approval of the state settlement remains an important procedural step before the transaction can move forward.
