Paramount reached a deal with US states and unblocked the merger with Warner Bros.

Paramount Skydance has reached a settlement with California and 11 other US states regarding the antitrust lawsuit that blocked its acquisition of Warner Bros. Discovery for approximately $110 billion. The settlement removes one of the major legal obstacles to completing the largest merger in Hollywood history.

The agreement still needs to be approved by a federal court. In July, a coalition of 12 state attorneys general filed a lawsuit seeking to stop the merger, arguing that it could reduce competition in film exhibition and cable television, decrease content production, and contribute to price increases.

Under the settlement terms, Paramount has committed to a series of obligations over the next five years. One of the main ones is to spend at least $1.5 billion more on American film production than the combined spending level of the companies in 2025.

The combined company must also release at least 30 films per year during the first two years, of which 20 must receive wide theatrical release. In the following three years, the minimum number of releases increases to 32, of which 21 must be wide releases. Each year, at least four independent films must be among them.

The terms include strict penalties for failure to meet this obligation. If the required production volume is not met, Paramount may be required to sell Miramax and pay $30 million for each missing film to union funds and antitrust enforcement financing.

Paramount will contribute an additional $47.5 million to a special fund for workers who lose their jobs due to the merger. The funds will go towards training and professional retraining. The company has also committed to honoring existing collective bargaining agreements.

Separate terms relate to the television business. For five years, Paramount must negotiate for the Paramount and Warner Bros. channels separately, so that after the merger the combined company cannot use increased market power in negotiations with operators.

The company has also committed to maintaining a free streaming service such as Pluto TV. A separate editorial independence board is planned for CNN and CBS News, which will oversee compliance with editorial standards after the merger./p>

California Attorney General Rob Bonta emphasized that the settlement does not mean states support the merger itself. According to him, the terms achieved eliminate the antitrust concerns that were subject to the lawsuit and provide additional protections for consumers and workers.

In addition, the Writers Guild of America, which separately sought to block the deal due to potential job losses and pressure on writers' wages, has also agreed to settle its lawsuit. Thus, two lawsuits that Paramount previously called the last significant obstacles to completing the acquisition are expected to be resolved after necessary court procedures.

Paramount announced back in August that it had received all necessary regulatory approvals for the deal in nearly 70 jurisdictions, including the US, European Union, and United Kingdom. The company stated that the state lawsuits and the writers' union lawsuit remained the main obstacles to closing the deal.

Sources: California Attorney General, The Washington Post, Paramount