Federal judge approves Paramount settlement, clearing $81B Warner deal

Settlement requires five-journalist editorial board for CNN, CBS News

A federal judge on Wednesday approved Paramount’s settlement with 12 state attorneys general, clearing the path for the company to complete its $81 billion acquisition of Warner Bros. Discovery. The settlement, announced last week, resolved an antitrust case brought by a dozen Democratic attorneys general led by California that had held up the deal since July.

Under the consent decree, Paramount agreed to invest at least $1.5 billion more in domestic production over five years and to commit funds to a workforce-training program for the entertainment industry. The company is behind films including “The Godfather,” “Top Gun” and “South Park.”

The states and the Writers Guild of America sued in July to block the deal on antitrust grounds. The attorneys general argued that the combination of Paramount and Warner would create too much concentration in the markets for theatrical films and television channels. The WGA said the combination of legacy media companies would reduce jobs for screenwriters.

The merger would bring two of the movie industry’s oldest studios, two major streaming services — Paramount+ and HBO Max — and dozens of television networks under one owner. The combined portfolio would include franchises such as Harry Potter, DC superheroes and “Game of Thrones,” as well as cable networks including CNN and Cartoon Network.

Also on Wednesday, David Ellison announced that Mattel Chief Executive Ynon Kreiz would become co-CEO of the combined Paramount and Warner companies.

Paramount pledged to release at least 30 films a year for five years. If it falls short, the consent decree requires it to divest its stake in Miramax and pay $30 million per missed film, with most of the proceeds going to support workers. If Paramount fails to negotiate cable distribution for Warner and Paramount separately, it would have to divest a group of cable channels.

The consent decree requires Paramount to create an editorial-independence board to oversee CNN and CBS News, the two news organizations it will control after the deal. Within 180 days of closing, the company must create a five-journalist editorial board with authority to resolve disputes involving CBS News and CNN employees over alleged violations of editorial principles, reporting bias and fairness standards.

David Ellison is the son of Larry Ellison, the Oracle billionaire and an ally of President Trump. Critics of the deal have suggested the family might interfere with coverage of the administration, allegations that Ellison has denied.