Paramount Settles with California AG, Clearing Path for Warner Bros. Acquisition
The agreement with Rob Bonta and 11 other states resolves a lawsuit that threatened to block the studio merger.
Paramount has reached a settlement with California Attorney General Rob Bonta and 11 other states, resolving a lawsuit that sought to block the studio's acquisition of Warner Bros. The agreement was announced Monday morning.
A 45-minute press conference was held by Bonta to unveil the news. The Writers Guild of America (WGA) has also separately settled its suit against Paramount concerning the merger.
As part of the settlement, David Ellison, CEO of Paramount, has pledged to maintain operations at both the Paramount and Warner Bros. studio lots. This commitment comes after Ellison had previously explored relocating operations out of California, with interest from Tennessee and Texas.
Paramount has agreed to hold to a commitment of releasing 30 films per year, a number that will increase to 32 after two years, with financial penalties for non-compliance. The studio will also invest a minimum of $300 million annually in domestic production over the next two years, with an increase in the third year. Additionally, Paramount will commit to releasing four independent films each year, and 20% of the studio's films must be classified as "blockbusters."
Independent editorial boards will be established for CBS News and CNN. The settlement does not stipulate that Paramount must maintain its headquarters in California, though Bonta expressed an expectation that Ellison and his company will remain in the state for the foreseeable future.
Negotiations reportedly extended late into the weekend, with four states initially holding out on the deal. By early Monday, Massachusetts, New York, Connecticut, and Minnesota reportedly agreed to the settlement after realizing the legal challenge was not viable without California's leadership, according to a source familiar with the discussions. Disagreements among the states over priorities, such as job protections and the future of CNN, had stalled progress.
New York Attorney General Letitia James was reportedly focused on job protections and CNN, while Bonta's primary concern was the broader impact on the studios. Bonta was reportedly working to finalize the deal amid concerns that Paramount would proceed with leaving California.
The case was slated for trial in March, with significant daily "ticking fees" of approximately $7 million set to begin on October 1 if the deal had not closed.