Paramount Skydance settles lawsuit with dozens of US states over Warner merger

Bonta: ‘Settlement is not a vote of support’ for Paramount-Warner merger

Paramount Skydance has settled an antitrust lawsuit with dozens of US states, removing a major hurdle to its $110bn (£82.8bn) merger with Warner Bros Discovery. The agreement, announced by California Attorney General Rob Bonta at a news conference, ends a challenge brought by a coalition of states led by California that had cited competition concerns across film and television. It also addresses separate concerns raised by the Writers Guild of America, according to Paramount Chief Executive David Ellison.

Under the settlement, Paramount must release at least 30 films each year and commit to an additional $300m to $1.5bn in US film and television production. Bonta described the financial commitment as a baseline figure that could expand substantially depending on federal action.

“Importantly, that is the baseline. That is the minimum,” Bonta said, noting that production commitments could surge by up to 700% if Congress passes a federal film tax credit.

The deal also imposes escalating US production thresholds. Under the deal’s initial terms, Paramount must ensure 20% of all film production takes place in the US for the first two years, rising over 30% over the following three years. Bonta maintained that, while mergers typically lead to corporate overlap and redundancies, it would be a “job creator” that will put people back to work across the industry.

Still, “the settlement is not a vote of support for this merger,” Bonta said. “I don’t think these two companies should merge.”

Paramount Chief Executive David Ellison welcomed the resolution, saying the agreement addresses concerns raised by both state attorneys general and the Writers Guild of America. In a statement, Ellison said the company’s “shared aim was an outcome that best serves consumers, workers and — most importantly — the creative community so vital to the art of visual storytelling.” He added that Paramount now has “complete clearance for this merger and looks forward to putting these commitments into action.”

Ellison had previously threatened to move studio operations out of California.

Ellison’s statement indicated the guild’s concerns had been addressed through the resolution.

The contingent 700% surge tied to a federal film tax credit would depend on congressional action. Ellison’s claim of “complete clearance” referred specifically to the state attorneys general and Writers Guild concerns raised in the lawsuit.