US judge clears way for Paramount-Warner merger

A federal judge on Wednesday approved a deal between Paramount and Warner Bros Discovery, clearing the last major legal hurdle for the largest media merger in recent history. US District Judge Araceli Martínez-Olguín ruled that the proposed consent decree was fair and reasonable in addressing competitive concerns raised by 12 US states.

The merger would combine Paramount+ and HBO Max streaming services with networks like CBS, CNN, MTV, TBS, and Food Network. The antitrust lawsuit, filed in July, alleged the merger would reduce competition in film distribution and cable programming, potentially leading to higher prices and fewer consumer choices. The states agreed to settle the claims after Paramount pledged to invest $1.5 billion in US film and television production over the next five years.

The settlement requires Paramount to release at least 30 films theatrically annually for the first two years and 32 in the following three years. It also mandates separate deals for cable channels and the formation of a "News Editorial Independence Board" to oversee CBS and CNN news operations. California Attorney General Rob Bonta, who led the lawsuit, stated the agreement protects workers and their families, though critics argue the commitments are insufficient and the merger could lead to job cuts, less independent filmmaking, higher costs, and diminished editorial independence.

Judge Martínez-Olguín emphasized the court is not a "rubber stamp" and deemed the settlement a reasonable resolution. Paramount CEO David Ellison will co-lead the merged company with Paramount CEO Ynon Kreiz, who joins as of October 5th, and the transaction is expected to close by early October.