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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowParamount Skydance has reached a settlement agreement with California and 11 other states that sued two months ago to block the company’s $110 billion merger with Warner Bros. Discovery, paving the way for a blockbuster unification of two Hollywood giants.
California Attorney General Rob Bonta announced the settlement at a Monday news conference in Los Angeles.
The decision is the latest twist in Paramount Skydance’s pursuit of Warner Bros. Discovery, a deal that would make the conglomerate one of the largest and most powerful companies in the entertainment business.
The deal would combine the Paramount and Warner Bros. studios, the TV giants CNN and CBS, and streaming services HBO Max and Paramount+.
It would also put David Ellison, the son of billionaire Oracle founder Larry Ellison and an ally of President Donald Trump, in charge of one of the most powerful companies in U.S. media. Warner Bros. initially agreed to sell most of its assets to streaming giant Netflix, spinning off CNN and other cable properties into a separate company, but Paramount Skydance launched a successful hostile bid that eventually led Netflix to abandon its plan.
The deal was cleared by the Justice Department in June. But one month later, a federal judge paused the merger after an antitrust lawsuit was brought by 12 Democratic state attorneys general, led by California. Bonta argued at the time that the deal would concentrate too much power in the hands of one company, leaving consumers worse off, and pledged the merger would never see “the light of day.”
In July, the states won a major concession from Paramount, which agreed to halt the merger until next summer to let the lawsuit play out. Such a wait would have been costly for Paramount, which would have had to pay Warner Bros. shareholders a “ticking fee” of about $7 million per day if the transaction was not finalized by the end of September. All the while, settlement talks carried on.
Paramount Skydance has said the merger will benefit consumers and workers in the entertainment industry.
The Writers Guild of America, the union representing Hollywood screenwriters and many journalists, has also sued to stop the deal.
Earlier this month, Paramount said the two lawsuits by the state attorneys general and the Writers Guild of America were the “only remaining barrier to closing this transaction.”
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