Paramount Skydance has reached a settlement with a coalition of 12 state attorneys general, clearing a significant legal hurdle that had been holding up its proposed acquisition of Warner Bros. Discovery.
The agreement was reached Monday after days of negotiations between Paramount and the states, led by California Attorney General Rob Bonta. The settlement comes shortly before Paramount was scheduled to begin paying Warner Bros. Discovery shareholders a $7 million-per-day fee beginning October 1 if the transaction remained incomplete.
The states had filed an antitrust lawsuit in July seeking to stop the approximately $111 billion transaction, arguing that combining the two entertainment companies would reduce competition in areas including basic cable and theatrical film distribution. A federal judge subsequently put the merger on hold while the case moved toward trial, which had been scheduled for March 2, 2027.
Paramount and the state attorneys general spent the weekend working through the terms of a potential agreement. Among the issues discussed were Paramount’s future presence in California, commitments involving film and television production, and safeguards concerning editorial independence at CBS News and CNN. The negotiations also included potential measures involving the company’s movie operations.
The precise terms of the settlement have not yet been publicly disclosed. However, reports indicate that the agreement does not require Paramount to carry out major divestitures.
The Writers Guild of America has separately challenged the merger in court, with its lawsuit also scheduled to be considered alongside the states’ case. The guild is expected to join the settlement reached with the states, potentially removing another legal challenge to the transaction.
If the agreement receives the necessary approvals, Paramount will be able to move closer to completing its acquisition of Warner Bros. Discovery without waiting for next year’s antitrust trial. The merger would combine Paramount’s film and television businesses with Warner Bros. Discovery’s studio, television, and streaming businesses.
Featured image: Mario Tama/Getty Images
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