Paramount Skydance reached a settlement on Monday, September 21, 2026, with a coalition of 12 states and the Writers Guild of America, removing legal obstacles to its $110 billion acquisition of Warner Bros Discovery. The agreement concludes a dispute led by California Attorney General Rob Bonta, who had sued to block the merger on antitrust grounds.
The coalition of states, which filed suit in July 2026, argued that the merger would reduce competition and allow the new entity to raise prices for movies and television. The Writers Guild of America filed a parallel lawsuit that month, claiming the deal would decrease pay and harm working conditions for writers. While federal regulators had previously cleared the transaction, the state-level legal challenges had paused the merger's progress.
Under the terms of the settlement, Paramount committed to maintaining specific theatrical release quotas for five years. The company must produce 30 movies annually for the first two years and 32 movies annually for the following three years. At least 20% of these must be blockbusters and four must be independent films. If Paramount fails to meet these quotas, it must pay a $30 million penalty per film, with the majority of the funds designated for worker support. Paramount also agreed to spend an additional $300 million per year on domestic production and pledged not to raise rates for theater operators for three years.
To address concerns regarding editorial independence at CBS and CNN, Paramount will establish a news editorial independence board. The settlement also includes headcount requirements for journalists at both networks. The Writers Guild of America stated it still believes the deal will damage the industry but noted it had to contend with the reality of moving forward without government backing. California Attorney General Rob Bonta described the resolution as providing "guardrails" to keep the industry competitive, even as he maintained he does not think the two companies should merge.
The transaction creates a combined entity with $80 billion in debt and significant control over film, television, streaming, and news markets. The settlement specifically protects the production of at least 30 films per year. By reaching this agreement, Paramount avoids a "ticking fee" of $7 million per day that it would have owed to Warner Bros Discovery shareholders if the deal had remained unclosed after September 30.
What happens next: The settlement allows the two companies to finalize the $110 billion merger, which has already received regulatory clearance in the European Union and Britain. Paramount executives, including CEO David Ellison, will now move to integrate the two companies' assets while adhering to the new oversight requirements for CBS and CNN. The film production quotas and spending commitments will remain in effect for the next five years, with the $30 million-per-movie penalty serving as the enforcement mechanism for shortfalls.