Paramount and Warner Bros. Discovery Merger Settled With State Attorneys General
Antitrust Hurdles and the Path to Settlement
The acquisition brings together two major film studios, a portfolio of television networks, the CBS broadcast network, and the Paramount+ and HBO Max streaming services. State officials, the Writers Guild of America union, and prominent actors and directors had raised concerns regarding the consolidation’s effects on the United States film industry and creative roles. Paramount CEO David Ellison noted in a statement reported by CNBC that the shared aim was an outcome serving consumers, workers, and the creative community. Bonta stated during a press conference that the settlement does not serve as a vote of support for the merger, asserting that further consolidation in central markets does not benefit the American economy, consumers, or competition.
Production Commitments and Theatrical Windows
Per the terms detailed by Bonta, Paramount agreed to boost domestic production spending by at least $300 million annually. The studio committed to releasing 30 films theatrically in its first two years and 32 in the following three years. Within those slates, at least 20 films must receive a wide release in more than 2,000 theaters during the first two years, rising to at least 21 films in the subsequent three years. Additionally, at least 20 percent of annual releases must operate as tentpole features with production budgets exceeding $50 million, while four films must be independent productions backed by a newly established purchasing fund. Paramount also agreed to maintain both the Paramount and Warner Bros. production lots in Los Angeles. Failure to meet these release goals carries a $30 million penalty per film, with 90 percent allocated to workers, alongside a potential requirement to divest the production company Miramax.
Financial and Operational Stipulations
Following Bonta’s press conference, company shares fell 3 percent after rising earlier in the day. Beyond theatrical quotas, the agreement mandates that Paramount and Warner Bros. continue negotiating cable packages separately, with a failure to comply triggering the divestment of a suite of cable channels. Ellison informed employees in a memo obtained by CNBC that the company expects to close the transaction in approximately two weeks.
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