By Mary O’KEEFE

There has been a settlement between Paramount Skydance Corporation and the 12 states that were suing the corporation regarding its merger with Warner Bros. Discovery.  

The 12 states are Arizona, California, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington. California led the effort. 

On Monday, California Attorney General Rob Bonta, who was leading the antitrust lawsuit, announced an agreement had been reached with Paramount Skydance. 

“Paramount Skydance Corporation (Paramount), resolving the states’ lawsuit alleging the merger of the entertainment giant and Warner Bros. Discovery (Warner Bros.) would harm competition by lowering output and raising prices, hurting both workers and consumers in the process. [Monday’s] settlement, pending approval by the court, includes a five-year court enforceable commitment to increase film output, a minimum of an additional $1.5 billion commitment to bolster domestic film production, a $47.5 million fund for workers who are impacted by the merger and restrictions on how the company handles cable negotiations to help keep prices competitive,” stated a release from Bonta’s office.

“[On Monday], we secured a settlement that resolves our antitrust concerns of the Warner Bros./Paramount merger – concerns that the merger will lower output and increase prices – by guaranteeing massive investment in domestic film production and providing enforceable guardrails to help keep cable prices competitive. Let me be clear: This settlement is not a vote of support for this merger. But we believe this settlement, which resolves our antitrust concerns in every market alleged in our case, protects competition and consumer choice and puts workers’ needs, concerns and futures first, is the best course of action,” said Attorney General Rob Bonta. “When we get down to brass tacks, what we heard over and over from people who would be most directly and immediately impacted by the merger is that what matters most is consistent film output, domestic production and protecting the livelihoods of workers above and below the line. As such, our settlement provides court-enforceable commitments for more films, an infusion of an additional $1.5 billion into home-grown film production and protections for workers who are impacted by the merger. There’s no Hollywood without the people who work on and off screen to make the magic happen and [Monday’s] settlement protects workers, jobs and Hollywood.”

Unions, including IATSE (International Alliance of Theatrical Stage Employees Movie Picture Technology, Artists and Allied Crafts of the United States), Directors Guild of America, LiUNA (Laborers’ International Union of North America), the Teamsters Union and Screen Actors Guild/American Federation of Television and Radio Artists, all praised the settlement. 

Also on Monday, the Writers Guild of America (WGA), which had brought a lawsuit against Paramount Skydance to stop the acquisition, also settled its lawsuit. 

“We continue to believe the merger will cause damage to writers and the industry at large. Now that the attorneys general have settled with Paramount, however, as a non-profit, the WGA must contend with the reality of forging ahead alone, with no backing from government enforcers, with a complex antitrust lawsuit that would cost millions of dollars to pursue through trial. Consequently, we have also settled our lawsuit with an agreement from Paramount to prohibit writer layoffs at CBS News Broadcast for [five] years, and to pay $17.5 million to our health fund along with our attorneys’ fees in the litigation. Though we were not successful in blocking the merger, our advocacy brought more attention to the harms that this merger – and others like it – will cause. We will continue to fight the harms of industry consolidation,” according to a WGA statement.

There is to be an independent editorial board established to monitor CBS News and CNN operations, now both owned by David Ellison companies. 

A few days after the settlement, some concerns have been voiced about the merger, including fears that media streaming prices will rise, there will be more layoffs at news outlets and concerns surrounding how “independent” the oversight board will be. 

The merger is now expected to be finalized sometime in October. Federal and international regulators have approved the Paramount Skydance/Warner Bros. Discovery merger. 

Settlement details:

The settlement of Sept. 21, 2026 includes: 

An Annual Film Release Commitment: Paramount has agreed to a five-year term, where the merged company will commit to release:

• 30 films a year — including 20 wide releases — in the first two years.
• 32 films a year — with 21 wide releases — in years three, four, and five.
• Paramount commits to release at least four independent films in each year of the commitment period.

If Paramount fails to meet this film output requirement in any year, the company will be required to divest Miramax Studios and must pay $30 million per missed film toward the healthcare and retirement trust funds associated with the Writers Guild of America (WGA), International Alliance of Theatrical Stage Employees (IATSE), Directors Guild of America (DGA), International Brotherhood of Teamsters (IBT) and other unions, and to the National Association of Attorneys General (NAAG) for more antitrust enforcement.   

Domestic Production: Paramount has agreed to bolster the merged company’s U.S. film production and spend an at least additional $1.5 billion over five years over its 2025 U.S. spending levels. Importantly, this is a baseline. Right now, around 5% of all of Paramount’s production is in the U.S. If a federal film tax credit of at least 20% is passed, production in the U.S. would need to increase to be 20% of all film production for years one and two and at least 30% of all film production for the remaining years. If, in addition to a federal tax credit, a more expansive state film tax credit is also passed in either California or New York, then production investment would need to increase to at least 40% of all film production being in the U.S instead of overseas.

In the next legislative session, Attorney General Bonta will be working closely with the legislature to uncap the California Film and Television Tax Credit in order to strengthen California’s competitiveness, encourage productions to spend and hire more in the state, and support jobs and businesses across the state.

Independent Film Fund: The merged company will form and operate a fund for purchasing independent films and will make an annual contribution of $5 million per year, for a total of $25 million.

Protections for Workers: The merged company will commit $47.5 million in a Workforce Fund over five years for training and career development for workers who are displaced by the merger. The merged company must also honor previously established collective bargaining agreements and bargain in good faith with unions in years to come.

Cable Agreements: For five years, the merged company must conduct negotiations for Paramount basic cable channels independently from negotiations for Warner Bros. basic cable channels, preserving the existing competitive dynamic between the companies. Preserving competition helps to keep prices down for consumers. The merged company also must continue to offer a free streaming service, like Pluto TV, and maintain its current service and quality. Additionally, the company agrees to a News Editorial Independence Board to help CNN and CBS maintain editorial independence.

Ongoing Monitoring: The company also agreed to appointment of an independent monitor to oversee its compliance with this agreement.