Paramount has reached a settlement with 12 states and the WGA, clearing a major legal hurdle for its acquisition of Warner Bros. Discovery.

Paramount has secured a settlement with California and 11 other states, as well as the Writers Guild of America (WGA), to resolve antitrust lawsuits blocking its acquisition of Warner Bros. Discovery. The agreement removes a significant legal barrier to the merger, which is now expected to close in early October. While California Attorney General Rob Bonta stated the settlement addresses antitrust concerns, some state officials expressed disappointment that the deal did not include full divestiture of news assets.

Settlement Terms and Production Commitments

Under the terms of the consent decree, Paramount must meet specific theatrical release quotas, starting with 30 films in the first two years and 32 annually thereafter. The company is also required to increase US production spending by at least $300 million over 2025 levels. At least 20 percent of these releases must be "tentpole" films with budgets exceeding $50 million, and four must be independent productions. Failure to meet these requirements triggers penalties of $30 million per missed film and potential divestiture of Miramax Studios.

Editorial Independence and Labor Agreements

The settlement mandates the creation of an editorial independence board for CBS News and CNN, consisting of five journalists with at least ten years of experience. Regarding labor, Paramount agreed to prohibit writer layoffs at CBS News Broadcast for five years and will pay $17.5 million to the WGA health fund, in addition to covering the union's legal fees. The company also committed to maintaining a free streaming service and agreed not to sell its California studio lots for five years.

Differing Perspectives on the Agreement

While California Attorney General Rob Bonta described the settlement as a way to protect competition and consumer choice, other officials remained critical. Connecticut Attorney General William Tong expressed deep disappointment, stating his office had pushed for the full divestiture of CNN and CBS News to preserve independent journalism. The WGA noted that while its objections to the merger remain, it chose to settle because pursuing the litigation alone without government support would be prohibitively expensive.