Paramount settles states’ antitrust suit over WBD merger

Hollywood’s latest blockbuster crossover is one major step closer to debuting in theaters.

Paramount officially reached a settlement yesterday with a coalition of 12 state attorneys general who sued to block its $81 billion takeover of Warner Bros. Discovery, removing one of the biggest remaining obstacles to the massive media merger.

Previously on Paramount v. AGs

In July, the states filed an antitrust lawsuit arguing that the Paramount-WBD merger would concentrate too much power over film and TV production under one roof, potentially reducing competition and driving up prices.

Paramount argued the opposite, saying the two companies combined would create a stronger competitor to entertainment giants like Netflix, Amazon, Apple, and YouTube.

Under the settlement’s terms, Paramount won’t have to immediately sell off any cable channels or major assets. Instead, the company agreed to several concessions, including independent editorial boards for CNN and CBS, spending $1.5 billion on California film production over five years, and releasing 30+ movies in theaters annually.

• Falling short of that movie target carries a $30 million penalty for each missing film, and would force Paramount to divest its stake in Miramax—meaning Mission: Impossible 19 may someday become a matter of fiscal responsibility.
• The media giant is also required to negotiate cable distribution for WBD and Paramount separately, or be forced to divest a group of cable channels.

Investors liked what they saw. Warner Bros. Discovery shares jumped ~10% following news of the settlement yesterday, while Paramount rose ~9%.

Looking ahead…Paramount has already cleared its deal with regulators in 69 jurisdictions, including the US Justice Department. But there’s still one major loose end: the Writers Guild of America has separately sued to block the merger, arguing it would reduce jobs and suppress writers’ pay.

Paramount and Warner Bros. previously agreed not to close their merger while that lawsuit remains unresolved, or until June 1, 2027.