Judge clears way for $110B Paramount-Warner Bros. merger

A federal judge approved an antitrust settlement Sept. 30, clearing the way for Paramount Skydance to acquire Warner Bros. Discovery and resolving a challenge from 12 states that argued the merger would reduce competition and raise prices for viewers. 

U.S. District Judge Araceli Martínez-Olguín of the Northern District of California signed off on the agreement, which imposes conditions on the combined company’s film output, cable licensing, and news operations. The settlement represents a “fair, reasonable, and good faith approach to address the competitive harms” alleged by the states’ lawsuit, she wrote. 

Paramount and Warner Bros. Discovery announced that they expect the acquisition to close Oct. 6, subject to customary closing conditions. The companies remain separate until they complete the transaction.

The agreement, announced in February, valued Warner Bros. Discovery at $110 billion, including debt. It would bring Warner Bros., HBO, HBO Max, and CNN under the same corporate ownership as Paramount Pictures, Paramount+, CBS, and Nickelodeon. 

California Attorney General Rob Bonta, a Democrat, led the coalition that sued in July, arguing that combining the companies would threaten consumers with higher prices and reduce the variety of entertainment available. The states reached the settlement with Paramount Sept. 21.

Under the settlement, the combined company must release at least 30 films in theaters annually for the first two years and 32 annually for the following three years. Paramount also committed to at least an additional $1.5 billion in U.S. film production spending over five years above its 2025 spending levels and a $47.5 million fund for training and career development for workers displaced by the merger.

For five years, the company must negotiate distribution agreements for Paramount’s basic cable channels separately from those for Warner Bros.’ basic cable channels. It must also establish a board to help protect editorial independence at CNN and CBS News. An independent monitor will oversee compliance with the agreement.

After the judge’s ruling, Paramount announced that Mattel Chairman and CEO Ynon Kreiz would join Paramount Oct. 5 and become co-CEO of the combined company when the merger closes. He will serve alongside Paramount Chairman and CEO David Ellison. 

The acquisition agreement followed a bidding war with Netflix, which had previously reached a deal to buy Warner Bros. Discovery’s studio and streaming businesses. Netflix declined to raise its offer Feb. 26 after Warner Bros. Discovery’s board determined that Paramount’s proposal was superior.