Judge Approves Paramount-Warner Bros. Discovery Merger Settlement

A federal judge has approved Paramount’s settlement agreement with 12 states, allowing the company to proceed with its $81 billion merger with Warner Bros. Discovery.

U.S. District Judge Araceli Martínez-Olguín ruled Wednesday that the proposed consent decree was a “fair, reasonable, and good faith approach to address the competitive harms” alleged in the states’ lawsuit. Paramount had identified the antitrust challenge as the final obstacle before closing the merger, with plans to finalize the acquisition as early as October.

Following the judge's decision, Paramount announced that Ynon Kreiz, current CEO of Mattel, will join as co-CEO of the combined company alongside David Ellison on Oct. 5.

The merger will unite two of Hollywood's legacy studios, bringing together assets such as HBO Max, the "Harry Potter" library, and cable networks like CNN with CBS, the "Top Gun" franchise, and the Paramount+ streaming service.

Top prosecutors from 12 states, led by California Attorney General Rob Bonta, filed a lawsuit in July seeking to block the merger. They argued that the combination would reduce competition and limit choices for consumers, particularly in movie theaters and for cable subscribers.

Last week, the states agreed to settle their claims through new commitments from Paramount. These include pledges to increase U.S. film production over the next five years, contribute millions of dollars to a fund for displaced workers, and establish new editorial monitoring for CNN and CBS. Bonta stated that the settlement focused on protecting jobs and livelihoods rather than endorsing the merger itself.

Despite the settlement, critics, including the Block The Merger coalition and the League of United Latin American Citizens, expressed concerns that the terms were insufficient. Judge Martínez-Olguín had previously indicated that the court would not simply act as a "rubber stamp" and sought further responses to questions raised by Democratic Sen. Cory Booker and outside critics.

However, in her Wednesday order, the judge concluded that the arguments for the settlement terms to be more extensive "do not rise to the level of legal violations upon which the Court can reject the parties’ negotiated resolution.”

The Block the Merger coalition described the settlement as "toothless," stating that allowing the merger to proceed without significant structural remedies could harm jobs, creativity, independent journalism, and First Amendment rights. The group, however, noted that the process had increased public awareness and attention to such corporate deals.

The Writers Guild of America, which had also filed a lawsuit in July, reached a settlement agreement with Paramount last week, acknowledging its inability to continue the legal fight independently.