States settle antitrust suit over $111 billion Paramount-Warner Bros. merger

California Attorney General Rob Bonta and a coalition of 12 state attorneys general have settled their antitrust lawsuit against Paramount Skydance’s $111 billion acquisition of Warner Bros. Discovery, clearing the way for the merger after months of litigation, according to Bonta’s office and CNBC. The states had sued in July, arguing in a 38-page complaint that the combination would “extinguish competition” across film and cable television.

Under the five-year, court-enforceable settlement announced September 21, Paramount Skydance must release at least 30 films annually, including 20 wide theatrical releases, in the deal’s first two years, rising to 32 films and 21 wide releases annually for the following three years. Missing those targets triggers financial penalties, including payments of $30 million per missed film to entertainment union funds and, under one condition, divestment of the Miramax studio.

The company also committed to at least $1.5 billion in additional domestic film production spending over five years, a $47.5 million workforce fund for employees displaced by the merger, and a pledge to honor existing collective bargaining agreements. A separate $25 million fund over five years is earmarked for independent film financing. Paramount agreed to maintain Pluto TV as a free streaming service, to negotiate its and Warner Bros.’ cable channels separately from each other for five years, and to create a News Editorial Independence Board overseeing CNN and CBS News. An independent monitor will track compliance.

Bonta was careful to frame the settlement as a constraint on the deal rather than an endorsement of it. “This settlement is not a vote of support for this merger,” Bonta said in his office’s announcement. “But we believe this settlement… protects competition and consumer choice, and puts workers’ needs, concerns, and futures first.”

Critics say the terms leave loopholes

The settlement drew sharp criticism from antitrust researchers and press-freedom advocates. Matt Stoller, research director at the American Economic Liberties Project, identified a loophole that could let the combined company release fewer films than Paramount and Warner Bros. currently distribute separately, and pointed to a force-majeure clause he said would let the company escape its commitments during an economic downturn or a labor dispute. Alvaro Bedoya, a senior adviser at the same organization, predicted the merger would still bring layoffs, higher consumer prices and less room for dissenting coverage inside a more consolidated media company.

Writer Cory Doctorow called the concessions “meaningless bullshit,” arguing that state negotiators gave up leverage without extracting real structural protections against the combined company’s market power. Once completed, the merger would give Paramount Skydance and Warner Bros. Discovery roughly 30 percent of both U.S. theatrical film distribution and basic cable channel licensing, according to figures cited in the settlement.

Press-freedom groups focused on the editorial board created to oversee CNN and CBS News. Free Press co-chief executive Jessica González said the model, which resembles an oversight structure Facebook used for content decisions, cannot guarantee editorial independence when the parent company appoints and pays the board’s members. Seth Stern, a media attorney at the Freedom of the Press Foundation, raised a separate concern: holding Paramount legally accountable for decisions made by a board the company itself appoints could run into First Amendment limits on regulating editorial judgment.

Former California Attorney General Xavier Becerra and Gov. Gavin Newsom were both involved in the state’s handling of the case before Bonta announced the final settlement terms. The agreement resolves the states’ lawsuit but does not require federal antitrust regulators to take any additional action on the merger.