Paramount moves closer to Warner Bros takeover after settling state, union lawsuits

Skydance-owned Paramount emerged from a major legal challenge to its proposed $110 billion acquisition of Warner Bros Discovery on Monday after reaching a settlement with a coalition of US states and the Writers Guild of America, clearing a key obstacle to one of Hollywood's biggest-ever media mergers.

The settlement is a major victory for Paramount CEO David Ellison, who had spent months fighting the legal challenge to complete the deal, which would significantly reshape the film, television, streaming and news industries.

Under the agreement with the states, Paramount will impose temporary production and theatrical release quotas and create a board overseeing editorial independence at CBS and CNN. The company will not be required to sell cable assets such as CNN or major film franchises.

Warner Bros Discovery shares jumped more than 10% on Monday, while Paramount shares pared earlier gains.

As part of the settlement, Paramount agreed to spend at least $300 million more annually on domestic film production and comply with US theatrical release quotas for five years.

The company will release 30 films in each of the first two years and 32 films annually for the following three years. At least four films each year will have to be independent productions, while at least 20% must be blockbusters.

If Paramount fails to meet the blockbuster requirement, it will pay $30 million per film, with most of the money going towards funds supporting industry workers.

Paramount also agreed not to increase rates charged to movie theatre operators for three years.NEWS OVERSIGHT AND HOLLYWOOD JOBS

The company will establish a news editorial independence board to oversee safeguards at CBS and CNN.

California Attorney General Rob Bonta described the settlement as a "strong antitrust outcome", while saying he still believed the two companies should not merge.

Paramount also agreed to the settlement with the Writers Guild of America, which had separately sued to block the transaction. The union maintains that the merger could hurt writers' pay and working conditions.STATES HAD CHALLENGED MERGER

A coalition of 12 state attorneys general, led by California, sued in July to stop the acquisition, arguing that the merger would reduce competition and give the combined company greater power to raise prices across the movie and television businesses.

The Trump administration's regulators had already cleared the transaction.

Paramount and Warner Bros Discovery have said the merger could generate about $6 billion in savings through cost-cutting measures, some of which are expected to affect jobs in Hollywood and at the CNN and CBS news operations.

The combined company is expected to carry about $80 billion in debt.

The settlement also helps Paramount avoid a $7 million-a-day fee it would have owed Warner Bros shareholders if the transaction had not closed beyond September 30.

Regulators in several other jurisdictions, including the European Union and Britain, have already approved the deal.- EndsWith inputs from ReutersPublished By: Nitish SinghPublished On: Sep 22, 2026 03:36 IST