Paramount has reached a settlement resolving the antitrust lawsuit that had delayed its acquisition of Warner Bros. Discovery. If the courts approve it, the agreement would clear the final significant obstacle to the proposed £85 billion merger, forming one of the largest media companies in the world.
The settlement introduces oversight designed to safeguard the editorial independence of news organisations, along with commitments covering film production and cable pricing. Notably, it does not require Paramount to give up control of its main networks or film studios.
The legal challenge began in July, when a group of 12 state attorneys general, led by California Attorney General Rob Bonta, sued Paramount. They argued the merger would concentrate too much control over news networks, cable television and the film industry. The action followed a year-long bidding contest for Warner Bros. Discovery, which left Paramount chief executive David Ellison as the leading bidder after Netflix withdrew.
What was agreed, and what was not
Under the consent decree, an agreed set of compromises resolving the lawsuit pending court approval, Paramount will establish an oversight board of journalists to protect the editorial independence of CNN and CBS News.
The company has also agreed to distribute 30 films in cinemas each year, with a greater proportion produced domestically, and to spend an additional £1.1 billion on film production over the next five years. Should it fail to meet those production and distribution commitments, it will be required to sell off those parts of the business. The merged entity will also retain both companies’ historical studio lots, guarantee continued film and television production in California, and fund the acquisition of independent films.
Further concessions ensure the companies’ cable channel bundles continue to be sold separately to distributors, a step intended to keep prices down and guard against monopolistic behaviour. The combined business would control roughly 27% of cable and satellite channel distribution if the deal proceeds. The agreement avoids requirements that would force Paramount to restructure the combined company, keeping CNN and both film studios intact.
What happens next
The Writers Guild of America East and Writers Guild of America West, jointly the WGA, had filed a separate lawsuit seeking to pause the merger, alleging it was illegal and harmed writers. With the states withdrawing from the dispute and citing an inability to sustain legal costs alone, the WGA announced it has resolved its companion lawsuit.
Bonta, who alleged in July that the proposed merger would lead to higher prices, lower quality and less content for consumers, cable distributors and cinemas, framed the settlement as a resolution of the lawsuit rather than an endorsement of the merger. The proposed transaction is valued at approximately £85 billion.
