Paramount settles lawsuit, clears path for $110 billion Warner Bros merger

Paramount Skydance announced on Tuesday that it has settled a lawsuit filed by dozens of U.S. states, clearing the most significant regulatory obstacle to its planned $110 billion merger with Warner Bros. Discovery. California Attorney General Rob Bonta said the agreement was reached after the studios pledged to protect competition in film, television and broadcasting, but he stressed that the settlement is not an endorsement of the deal. “I don’t think these two companies should merge,” Bonta said at a news conference.

The dispute stemmed from concerns that the combined company could dominate the market and diminish opportunities for independent creators. State officials, joined by the Writers Guild of America (WGA), demanded concrete safeguards before allowing the merger to proceed. Under the settlement, Paramount must release at least 30 films a year, with 20 % of all production taking place in the United States for the first two years and rising to over 30 % in the following three. The agreement also bars the studios from relying on AI‑generated content to meet the quota, requires an independent monitor to oversee compliance, and obliges Paramount to pay $17.5 million into the WGA health fund, cover the guild’s legal fees and prohibit writer layoffs at CBS News for five years. The WGA, while acknowledging the settlement, warned that the merger could still harm writers and the broader industry.

State officials say the deal will boost domestic film production and create jobs. Bonta projected a minimum economic impact of $300 million to $1.5 billion, noting that the baseline could rise dramatically if production commitments expand. Paramount CEO David Ellison welcomed the resolution, saying it clears the path for the merger and affirms a commitment to consumers, workers and the creative community. The merger now awaits final regulatory sign‑off, with the independent monitor slated to begin its oversight role within weeks.