Paramount’s efforts to strong-arm a number of states into settling their antitrust lawsuit over the entertainment giant’s ambitions to acquire Warner Bros Discovery (WBD) appears to have worked, with threats to relocate their corporate headquarters and content production business out of California helping to secure a pending settlement in the case, according to multiple reports on Monday.
The settlement does not require Paramount to sell major cable channels, according to reports from the Wall Street Journal and others, sparing the company from one of the more significant structural remedies that had been under discussion.
But the settlement does contain a number of concessions from Paramount, including a commitment to produce a certain number of theatrical releases per year and maintain their business operations in California for at least the foreseeable future.
The company has also agreed to establish a board of journalists intended to safeguard the editorial independence of CNN and CBS News, according to those reports, easing a major concern over the editorial integrity of both networks under a single owner who has curried favor with powerful political figures in the Trump administration and, at times, President Donald Trump himself.
The settlement removes what had become the most serious remaining obstacle to Paramount’s takeover of WBD. The deal would bring the Paramount and Warner Bros movie studios under common ownership along with Paramount Plus, HBO Max, CBS, CNN and dozens of cable television networks.
The states sued to stop the combination after federal antitrust regulators declined to block it. Bonta’s office previously said the transaction would combine two of Hollywood’s five major film distributors and two of the five largest owners of basic cable channels, potentially giving the combined company nearly one-third of both markets.
Paramount has rejected those arguments, maintaining that the transaction will allow the company to compete more effectively against larger streaming companies.
The settlement also arrives at a financially important moment for Paramount. Beginning October 1, the company was expected to start paying Warner shareholders roughly $650 million per quarter — about $7 million per day — in delay-related fees until the transaction closed.
The Writers Guild of America filed a separate antitrust lawsuit against the merger in July, arguing the combination would reduce employment opportunities and suppress compensation for writers.
Reports Monday indicated the guild was also expected to participate in the settlement process.
Paramount, WBD and the states attorneys general offices have not yet commented on the reports.
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