Paramount has reached a settlement with California Attorney General Rob Bonta, resolving a multi-state antitrust lawsuit and clearing a significant hurdle for its proposed merger with Warner Bros. Discovery. The agreement, reported by sources, addresses concerns over potential consumer harm and content reduction.
As part of the settlement, Paramount has committed to releasing 30 movies annually and pledged to remain in California for multiple years, a move that comes after the company had previously threatened to exit the state. Sources also indicated that the agreement includes provisions for independent editorial boards at CBS News and CNN. The Wall Street Journal had previously reported that concessions could involve a $1.5 billion investment in California film production and a potential penalty if Paramount fails to meet its 30-film commitment.
The resolution saw a notable market reaction, with shares in Paramount and Warner Bros. Discovery experiencing increases of 6.6% and 9.8% respectively by mid-morning on the day of the report. The involvement of New York Attorney General Letitia James was reportedly a key factor in finalizing the settlement. While Massachusetts, Connecticut, and Minnesota had also opposed the deal, their decisions were influenced by California's stance.
This settlement comes after a period of significant legal and regulatory challenges. In July, 12 state attorneys general, led by Bonta, filed an antitrust suit aiming to block the merger. They argued that the combination would lead to higher consumer prices, reduced content variety, and fewer jobs. The Writers Guild of America also pursued legal action, citing potential job losses for screenwriters.
Paramount had expressed concerns about the potential economic impact of leaving California, with reports suggesting it could affect nearly 58,000 jobs and $21 billion in annual economic output. The legal battle was on a tight timeline, with a trial in California scheduled for March and a substantial daily penalty fee set to begin on October 1 if the deal remained in limbo.
Earlier in the process, the Trump administration's Department of Justice had approved the deal in June. The proposed merger would consolidate major media assets, including HBO Max, Paramount+, HBO, CBS, and CNN, under a single entity led by David Ellison. Paramount had previously sought a federal judge to compel the opposing states and the Writers Guild to provide a bond of approximately $1.9 billion, intended to compensate the company if it ultimately prevailed in the lawsuit.
Amidst the legal proceedings, California officials, including Governor Gavin Newsom and Los Angeles Mayor Karen Bass, had reportedly urged Bonta to seek a resolution, emphasizing the importance of protecting in-state production and jobs.