Paramount Skydance Corp.’s (NASDAQ:PSKY) $110 billion acquisition of Warner Bros. Discovery, Inc. (NASDAQ:WBD) has cleared a major legal hurdle after the company reached a settlement with a coalition of U.S. states and the Writers Guild of America.
Paramount Warner Bros. Discovery Merger Clears Antitrust Fight
The settlement on Monday allows the merger to move forward while requiring Paramount to accept several conditions aimed at addressing concerns over competition, jobs and media concentration.
During a press conference, California Attorney General Rob Bonta, who led the state’s challenge, described the agreement as a "strong antitrust outcome," Reuters reported.
On X, Bonta said, "Today’s settlement protects workers, jobs, and Hollywood."
Under the settlement, Paramount will spend at least $300 million more annually on U.S. film production and follow theatrical-release requirements for five years.
It must produce 30 movies in each of the first two years and 32 annually for the next three years, with requirements for independent films and blockbusters.
Paramount will also face a three-year restriction on raising rates for theater operators and will establish a news editorial independence board overseeing CBS and CNN.
Elizabeth Warren, Chris Murphy Slam Paramount Deal
Sen. Elizabeth Warren (D-Mass.) called the settlement a "disastrous outcome."
"A handful of billionaires" should not have the power to shape the media landscape, Warren said, adding that the new Paramount could face future antitrust scrutiny.
Sen. Chris Murphy (D-Conn.) said the merger is "illegal on its face" and argued the settlement could lead to higher prices and more media consolidation.
Actor Mark Ruffalo also criticized the agreement, saying on X that California Gov. Gavin Newsom (D) had handed a "huge win to Trump and his billionaire cronies."
$110B Media Merger Moves Closer to Closing
The Writers Guild of America also settled its separate lawsuit while maintaining that the merger could harm the entertainment industry.
Paramount had faced a $7 million-per-day fee if the transaction remained incomplete beyond Sept. 30. Regulators in the European Union and the U.K. have already cleared the deal.
The legal challenge comes after months of uncertainty surrounding Warner Bros. Discovery’s sale, with Netflix Inc. (NASDAQ:NFLX) and Paramount Skydance emerging as competing bidders before Netflix ultimately withdrew from the race.
The Donald Trump administration backed Paramount Skydance early in the bidding process. Trump has previously expressed public support for the Ellisons, calling them "good friends."
Price Action: Paramount Skydance shares closed at $9.91, down 2.94%, on Tuesday. In after-hours trading, the stock rose 1.37% to $10.05, according to Benzinga Pro.
According to Benzinga Edge Rankings, PSKY ranks in the 14th percentile for Momentum, with positive short- and medium-term but negative long-term price trends.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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