Paramount’s $111 billion bid for Warner Bros. Discovery just got past its biggest legal obstacle. After days of marathon negotiations, Paramount Skydance and a group of state attorneys general led by California’s Rob Bonta settled the antitrust suit on Monday, September 21, according to the Hollywood Reporter.
Bonta announced the deal at a press conference in Los Angeles. He was careful to say up front that the settlement was not an endorsement of the merger.
What Paramount agreed to
The terms run five years. Paramount will put $1.5 billion into domestic film production and release 30 films a year in theaters. It will stay in California and not sell its studio lots, which answers an earlier threat to leave the state. And it will appoint an independent board to oversee the editorial independence of CNN and CBS News, per LinkedIn News.
CEO David Ellison praised the outcome. “We’re confident this agreement does exactly that, memorializing a series of commitments that include 30+ films annually and expanded U.S. film production to help revitalize our industry here at home,” he said. Plenty of people in the industry doubt the studio can sustain that many releases.
The details of any divestitures were still unannounced when the news broke. Bonta had said he would take only structural remedies, and the Hollywood Reporter said the sticking points were running the two studios independently and selling off cable assets. For Ellison, giving up CNN was a non-starter.
The clock and the money
Timing mattered. A ticking fee of $7 million a day was due to start on October 1, and the settlement lets Paramount avoid it if it can close within roughly ten days. Paramount had said it would leave California if no deal came by that date, a stance Bonta called “blackmail.”
The fight was bitter and public. Texas and Tennessee both courted the company, and the Writers Guild of America sued as well, arguing a single mega-buyer of film and TV programming would suppress writers’ wages. Consumers had also filed a complaint earlier in the year. Ellison thanked Bonta, the other attorneys general and the WGA for engaging in good faith. Paramount argues the merger will help it compete with Netflix, Amazon and Apple.
Sources
- There’s a Deal: Paramount, 12 States to Settle Warner Bros. Fight
- Paramount settles antitrust lawsuit, clearing path for WBD merger | LinkedIn
