Paramount settles with US states to clear Warner Bros. mega-merger

Paramount has reached a settlement with a group of US states that clears the way for its takeover of Warner Bros. Discovery, officials announced Monday, creating a Hollywood empire spanning television, news and cinema.

Paramount, run by David Ellison, whose ultra-wealthy family has ties to US President Donald Trump, won a bidding war against Netflix in February for control of a stable of assets including Warner Bros. Pictures, CNN and the HBO Max streaming service.

The Trump administration approved the deal, one of the largest media mergers in years, in June without requiring changes to the transaction. Twelve US states subsequently sued to block the deal.

How the deal was funded

Financing for the deal reportedly includes about $24 billion in equity from the sovereign wealth funds of Saudi Arabia, Qatar and Abu Dhabi.

David Ellison's father, billionaire Oracle founder Larry Ellison, also provided funding and a guarantee.

Concerns over jobs and CNN

Opponents in the movie industry argued that the combined company would cut jobs in a Hollywood already under pressure and reduce the number of films produced each year.

News media groups also raised concerns that CNN's editorial independence could be compromised.

The settlement includes several safeguards, including a board intended to protect CNN's editorial independence.

The development comes just days after Trump banned CNN, Politico and MS NOW from the White House. The outlets are suing the administration to have the decision reversed.

California led the lawsuit

Paramount had threatened to move out of California if the state's attorney general, Rob Bonta, did not negotiate an end to the lawsuit.

In their complaint, the 12 states argued that the combined company would control roughly 27 per cent of wide-release theatrical film distribution, as well as a similar share of the basic cable channel industry.

California led the lawsuit, joined by Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington.

States agree to settlement

Four states — Massachusetts, New York, Connecticut and Minnesota — had held out but concluded that continuing the fight without California was not worth the expense, Bloomberg reported.

Bonta told reporters that protecting jobs was a major concern in his handling of the case and acknowledged that many people may be disappointed with his decision to strike a deal.

“My job as attorney general is to look at the facts and look at the law, weigh the options in front of us, and make the best decisions for the people of California,” he said.

Film production commitments

Bonta said the settlement requires the merged studio to produce 30 films in each of the first two years of the deal and 32 films in each of the following three years.

At least four of those films must be independent productions, while at least 20 per cent must be blockbusters, Bonta said.

The terms include a financial penalty if Paramount fails to meet the targets.

According to a joint court filing, the deal also requires Paramount and Warner Bros. to spend at least $300 million more annually on US film production than they did in 2025.

The companies must also keep both studios' production lots, honour labour agreements and commit funds to workforce training, the filing said.

Safeguards for CNN

The settlement creates a News Editorial Independence Board to set editorial principles for the combined company's news channels, including CNN.

Compliance would be overseen by an internal monitor, an independent trustee and a committee of five states, with the court retaining jurisdiction over enforcement.