Paramount Settles State and Union Antitrust Suits to Advance $110B Warner Bros. Discovery Merger

Paramount Skydance has reached settlements with state attorneys general and the Writers Guild of America, clearing legal obstacles to its $110 billion acquisition of Warner Bros. Discovery, according to reporting by CNBC Business (https://www.cnbc.com/2026/09/21/paramount-reaches-settlement-over-warner-bros-merger.html). The agreements, announced Monday, resolve an antitrust lawsuit led by California Attorney General Rob Bonta that had been scheduled for trial in March and threatened to stall the deal through mid-2027.

The transaction unites two major film studios, broadcast network CBS, news divisions CNN and CBS News, a large suite of pay-television networks, and streaming services Paramount+ and HBO Max. While the merger had previously secured clearances from federal and international regulators, California and 11 other states challenged the transaction in mid-July over market consolidation concerns.

Under the terms detailed by Bonta, Paramount agreed to increase domestic production spending by at least $300 million annually and keep both the Paramount and Warner Bros. studio lots in Los Angeles. If a federal film tax credit is enacted, Paramount must produce 20% of its films domestically in the first two years post-close and 30% over the subsequent three years, up from approximately 5% currently.

The settlement also binds Paramount to theatrical distribution commitments: 30 films released theatrically across its first two years and 32 in the following three years, including four independent titles funded through a new dedicated indie film vehicle. Falling short of these targets carries a $30 million penalty per film—with 90% directed to industry workers—and could force the divestiture of production company Miramax.

To address pay-TV and media concentration, Paramount must continue negotiating cable packages separately or face mandatory divestitures of certain cable channels. The company must also establish an independent oversight board and select a compliance trustee to preserve editorial independence across CBS News and CNN. Additionally, Paramount will contribute $9.5 million annually toward workforce training, career development, and local arts initiatives, while honoring existing collective bargaining agreements.

The Writers Guild of America also settled its parallel lawsuit, agreeing to terms after concluding it could not sustain a multi-million-dollar trial without government backing. Paramount agreed to prohibit writer layoffs at CBS News' broadcast team for five years, cover the guild's legal fees, and contribute $17.5 million to the WGA health fund.

Resolving the litigation avoids significant financial penalties for Paramount. A contractual ticking fee set to take effect after Sept. 30 would have required Paramount to pay WBD shareholders an extra 25 cents per share each quarter, adding an estimated $650 million in quarterly cash value until closing. Paramount CEO David Ellison stated that the agreement achieves a resolution serving consumers, workers, and the creative community.