Paramount wins Warner Bros takeover with settlement

Paramount Skydance secured a major victory on Monday following a legal dispute over the US$110 billion acquisition of Warner Bros Discovery. The settlement, reached with a California-led group of US states and a Hollywood writers union, clears the path for what could be one of the largest media mergers in history. Paramount CEO David Ellison, who led the fight against the states, will now abide by temporary film quotas and a news oversight committee, sparing cable assets like CNN and its valuable film franchises from forced sales.

The deal pleased Warner Bros shareholders but angered opponents who warned it could harm Hollywood jobs. The Writers Guild of America also settled its parallel case against Paramount, acknowledging the merger might hurt the industry despite the settlement. California Attorney General Rob Bonta hailed the settlement as a robust antitrust outcome, pledging more domestic film production and adherence to US theatrical release quotas for five years.

Paramount will produce 30 films annually for the first two years, 32 for the next three, with at least four independent films and 20% blockbusters each year. Non-compliance would result in a $30 million penalty per film. The company will also not raise theatre operator rates for three years. Paramount will establish a news editorial independence board for CBS and CNN.

The merger is expected to save US$6 billion annually through cost cuts, potentially affecting jobs at CNN and CBS newsrooms. The combined company is projected to hold US$80 billion in debt. The settlement alleviates a looming US$7 million-a-day fee Paramount would owe Warner shareholders if the deal fell through past September 30. Global antitrust regulators, including the EU and Britain, have already cleared the deal.