Paramount Skydance has reached a settlement with 12 state attorneys general, removing the last major legal obstacle to closing its $111 billion acquisition of Warner Bros. Discovery — the largest merger in Hollywood history.
The states’ antitrust lawsuit had put the merger on hold pending a trial scheduled for March 2, 2027. With the settlement now in place, the deal is expected to close before October 1, the date on which Paramount CEO David Ellison would have owed Warner Bros. Discovery’s board a $7 million-per-day ticking fee. Had the case gone to trial as scheduled, that fee alone could have topped $1 billion.
According to Variety, the settlement does not require Paramount to make any major divestitures. Sources told the outlet that discussions centered heavily on editorial oversight of CBS News and CNN, a key demand from East Coast attorneys general.
Bloomberg reports that the holdout states secured independent editorial boards for CBS and CNN as part of the final terms. The deal also reportedly includes a $30 million financial penalty for each film that falls short of Ellison’s pledge to produce 30 movies a year.
The editorial-board provision was the central sticking point in negotiations, with California Attorney General Rob Bonta among the officials pushing for government-mandated oversight of how the news divisions are run under the new ownership.
The merger comes as traditional studios face growing pressure from Alphabet, Meta, Apple and Netflix, all of which have expanded aggressively into entertainment content. Combining Paramount and Warner Bros. Discovery gives the new company more scale to compete against those tech giants.
Ellison had reportedly threatened to relocate Paramount to Tennessee if regulators continued to block the deal — a threat that added pressure on state officials as negotiations dragged on. He also fended off a rival bid from Netflix, which had earlier reached its own agreement with Warner Bros. Discovery before Paramount’s terms won out.
