Warner Bros. Merger Back On: Paramount Settles Antitrust Suit
Paramount has reached a settlement in the 12-state antitrust suit, clearing the path for its proposed $111 billion Warner Bros. Discovery merger.
Paramount reached a settlement on Monday, resolving the antitrust lawsuit that delayed its acquisition of Warner Bros. Discovery, according to The New York Times. The deal, worth $111 billion, aims to create one of the world’s largest media companies. The agreement includes oversight to ensure editorial independence for news organizations and protections for film production and cable pricing.
No requirement for Paramount to give up control of its networks or film studios is included. In July, 12 state attorneys general, led by California's Rob Bonta, sued Paramount over the merger, citing concerns about market concentration in news, cable TV, and movies. The lawsuit followed a year-long bidding war for Warner Bros. Discovery, with Paramount CEO David Ellison ultimately emerging as the leading bidder after Netflix withdrew.
The consent decree, pending court approval, requires Paramount to set up a board of journalists to protect news editorial independence, distribute 30 movies in theaters annually with more domestically produced films, and spend an extra $1.5 billion on film production over five years. Non-compliance would result in the sale of affected business parts.
The merged entity will retain both companies' studio lots, maintain California's movie and TV production, and fund independent film acquisitions. The arrangement also keeps cable channel bundles sold separately to distributors, aiming to maintain competitive pricing. The agreement averts the need for Paramount to restructure the combined company, keeping CNN and the film studios intact.
The Writers Guild of America East and West did not pursue their lawsuit, as they deemed the state-backed settlement sufficient. While Bonta believes the merger could lead to higher prices, lower quality, and less content for consumers, he framed the settlement as a resolution rather than a merger endorsement. Paramount CEO Ellison plans to finalize the deal in about two weeks, though this timeline has not been officially confirmed.
Paramount agreed to pay Warner Bros. Discovery shareholders $7 million per day if the deal falls through by Oct. 1, though this penalty is less costly than a drawn-out trial.
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