LOS ANGELES (Diya TV) — Paramount Skydance has reached a settlement with California and 11 other states that sued to block its proposed acquisition of Warner Bros. Discovery, removing a major legal obstacle to the roughly $110 billion deal.
The states sued in July, arguing that the merger would reduce competition in theatrical film distribution and cable television. California Attorney General Rob Bonta led the coalition.
Under the settlement, Paramount agreed to create independent editorial boards for CNN and CBS News. The company also committed to releasing at least 30 films in theaters each year and would face a $30 million penalty for each film it falls short of that target.
Paramount also agreed to spend $1.5 billion on film production in California over the next five years, according to a person familiar with the agreement.
A federal judge must still approve the settlement before the states dismiss their antitrust claims. Paramount and Warner Bros. Discovery could then move closer to completing the transaction.
The Justice Department and regulators in several other countries have already cleared the merger. The Writers Guild of America, however, continues to pursue a separate lawsuit seeking to block the deal, arguing that the combination could reduce jobs and bargaining power for writers.
The merger would bring Paramount Pictures, CBS, Paramount+ and Pluto TV under the same ownership as Warner Bros., HBO, HBO Max, CNN and several other cable networks.
Paramount faces additional costs if the transaction remains incomplete after Sept. 30. Under its merger agreement, the company must pay Warner Bros. Discovery shareholders about $7 million for each day the closing extends beyond that deadline.
