A settlement was expected to be announced Monday in a lawsuit filed by California and 11 other states challenging the proposed merger of Paramount Skydance and Warner Bros. Discovery, setting the state for the deal to proceed but with a series of concessions on both sides.
Reports over the weekend indicated that significant progress had been made in settlement talks, and various media outlets reported Monday morning that a deal had been struck. California Attorney General Rob Bonta then scheduled a 10 a.m. news conference in Los Angeles “to make an important announcement” that his office said would “keep California vibrant.”
According to the various media reports Monday, the proposed settlement would include a commitment from Paramount to release at least 30 theatrical movies annually, with penalties of up to $30 million per film it fails to produce to meet that quota. The company is also expected to maintain local film and television production.
The deal is also expected to include a guarantee that news organizations included in the deal — CBS News and CNN — will continue to have independent editorial boards, according to various reports. That provision comes amid fears that the organizations’ journalistic integrity might be compromised under pressure from President Donald Trump in exchange for his support of the merger.
News of the apparent settlement came after weeks of acrimony between Paramount and Bonta over the proposed combination of two of Hollywood’s largest studios.
Bonta led a coalition of 12 state attorneys general in filing the antitrust lawsuit in July seeking to block the deal, arguing that combining Paramount and Warner Bros. would reduce competition in the movie and television industries.
Paramount has disputed those claims and argued the merger would give the combined company the scale to compete with larger technology and entertainment companies.
The companies subsequently agreed not to complete the merger until June 1, 2027, or until after a court ruling on the states’ claims, whichever comes first.
Previously, the two sides agreed to participate in court-ordered settlement talks Oct. 14 and 15.
A previous effort to hold settlement discussions collapsed in August when Bonta canceled a planned session and accused Paramount of leaking information from confidential discussions and “playing games.” Paramount denied being the source of the leaks.
Paramount CEO David Ellison has additional financial incentive to resolve the dispute before Oct. 1. Under the terms of the planned merger, Paramount would be required to pay Warner Bros. Discovery shareholders an additional $7 million a day beginning Oct. 1 on top of the $81 billion it has agreed to pay them if the lawsuit was not resolved.
Paramount had also increased pressure on state and local officials in recent weeks by threatening to move the company out of California if the legal fight continues. The possibility has raised concerns among officials seeking to stem the loss of film and television production jobs from the Los Angeles area.
The merger has received regulatory approvals in more than 65 nations. The Federal Communications Commission has also approved a foreign ownership structure for the proposed combined company.
A federal trial on the states’ antitrust challenge is scheduled for March.