Paramount seals settlement over Warner Bros. merger

Paramount Skydance has cleared one of the final obstacles standing between it and Warner Bros. Discovery, although the price is a rather specific Hollywood to-do list.

Under an antitrust settlement reached with 12 US states, Paramount must make more films, keep them in cinemas longer, increase spending on American production and establish a board to oversee the editorial independence of CNN and CBS News.

The agreement moves Paramount’s proposed $164 billion merger with Warner Bros. Discovery closer to completion, bringing Warner Bros., HBO, CNN, CBS, Paramount Pictures and a formidable collection of television and streaming assets into the same company.

In Australia, the deal would place Network 10, Paramount+ and Max under common ownership.

Paramount chief executive David Ellison said the settlement, combined with a separate agreement with the Writers Guild of America, gave the company “complete clearance for this merger”.

“Our shared aim was an outcome that best serves consumers, workers and, most importantly, the creative community so vital to the art of visual storytelling,” Ellison said.

Thirty films a year, and they have to be real films

Paramount must release at least 30 films annually during the first two years of the agreement, rising to 32 for the following three years.

At least 20 films must receive a wide theatrical release, increasing to 21 in later years. Four must be independent productions, while 20% of the slate must carry a budget above approximately $75 million.

In other words, Paramount cannot satisfy regulators by quietly producing 30 films that look as though they were shot in someone’s garage over a long weekend.

California Attorney General Rob Bonta said safeguards would stop the company meeting its quota with low-budget or AI-generated productions. Officials wanted “real, robust movies” that generate work and economic activity.

The settlement also guarantees films a minimum 45-day theatrical window. They cannot move to a subscription streaming service until at least 90 days after their cinema release.

Paramount has committed to spending at least $447 million more each year on US film production than it did in 2025, totalling about $2.2 billion over the five-year agreement.

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Miss the target and Miramax could go

The production promises come with more than a stern letter.

If Paramount misses its annual target, the combined company could be forced to sell its 49% stake in Miramax. It would also have to contribute approximately $45 million to Hollywood guild healthcare and retirement funds for every film it falls short.

Bonta said the settlement could turn a looming decline in domestic production into greater investment and employment. However, he stressed it was “not a vote of support for this merger”.

The agreement also prevents Paramount or Warner Bros. from selling or closing their studio lots during the five-year commitment period.

An independent monitor will oversee compliance, ensuring those promises do not disappear once the ink dries and the corporate photographs have been taken.

CNN and CBS News avoid the auction block

The settlement stops short of forcing Paramount to sell CNN or CBS News, despite concerns about placing two major American news operations under one owner.

Instead, the company must establish a five-person News Editorial Independence Board to develop journalism and editorial principles for both organisations.

Each member must be a current or former journalist with at least 10 years of experience. No more than two can be affiliated with the same political party.

There is, however, one teeny, tiny wrinkle: Paramount’s board will appoint them.

Connecticut Attorney General William Tong said his state had pushed for the complete separation of CNN and CBS News.

“We wanted to save ethical and independent journalism and news. We fought aggressively for that remedy. I am deeply disappointed that we could not do more,” Tong said.

Whether the board becomes a meaningful guardrail or another piece of corporate furniture will depend on who is appointed and how much power they receive.

Under a separate settlement, Paramount will contribute approximately $26 million to the Writers Guild of America’s health fund, cover its legal costs and prohibit writer layoffs at CBS News Broadcast for five years.

The WGA continues to believe the merger “will cause damage to writers and the industry at large”, but said it could not afford to fight it alone without government support.

Cable channels stay, but bargaining power is curtailed

Paramount will not be forced to sell its cable television channels.

It must, however, negotiate distribution agreements for the Paramount and Warner Bros. channel portfolios separately for five years. The merged company must effectively behave like two competing businesses when dealing with pay television distributors.

Confidential information from one side cannot be used in negotiations for the other. If Paramount breaches those conditions, a court could order it to sell cable assets.

The restrictions curb some of the leverage Paramount hoped to gain, but leave the central prize intact: a global entertainment giant spanning film, television, streaming and two influential newsrooms.

Paramount has its clearance. Now it just has to make the movies, protect the journalists, keep the studio lots open, negotiate against itself and avoid losing Miramax.

For a $164 billion Hollywood merger, there was never going to be a simple ending.