Paramount Skydance settlement clears way for completion of Warner Bros. Discovery acquisition

Shares of Paramount and Warner Bros. Discovery rose by 10% each during Monday's trading session following the agreement between the media conglomerate and 12 state attorneys general to settle an antitrust lawsuit. The $110 billion merger was under scrutiny due to concerns that it would create a dominant force in the theatrical film and cable channel markets, potentially hurting the entertainment industry.

The settlement, expected to be announced later on Monday, aims to address these concerns and provide remedies to the state AGs. Paramount, led by David Ellison, had pledged to release 30 films theatrically per year, but California AG Rob Bonta demanded structural remedies such as divestments of cable channels. Other potential terms discussed included separating the companies' studios temporarily and ensuring safeguards for CNN and CBS News' editorial independence.

The settlement terms have not been disclosed yet, but Paramount will likely avoid selling cable networks and may face financial penalties if it fails to meet the goal of releasing 30 theatrical films per year. The deal comes as Paramount was preparing for a March trial against the state AGs and the Writers' Guild of America. A 25-cent per share ticking fee would have been paid daily until the settlement, providing additional incentive for the company to reach an agreement.