Paramount wins court approval for Warner Bros. deal

Paramount Skydance has cleared the remaining court hurdle to its takeover of Warner Bros. Discovery, after a US federal judge approved a settlement requiring film production commitments, worker support and safeguards for CNN and CBS News.

US District Judge Araceli Martínez-Olguín approved the agreement with 12 state attorneys general on September 30, allowing the companies to proceed towards closing the acquisition in early October. The ruling ends a legal standoff over whether the combination would weaken competition in film and television.

The transaction values Warner Bros. Discovery at approximately A$157 billion, including debt. It will bring Warner Bros., HBO and CNN into the same corporate group as Paramount Pictures, CBS and Paramount+, combining franchises including Harry Potter, Game of Thrones, Mission: Impossible and Top Gun.

The commitments behind the deal

California-led states sued in July, arguing the merger could reduce film output and give the combined business more power to raise prices.

Under the settlement, the merged company must release 30 theatrical films annually for its first two years, rising to 32 in each of the following three years. Those commitments include minimum numbers of wide releases and at least four independent films each year.

Paramount must also spend at least an additional A$2.15 billion on US film production over five years, above its 2025 spending levels, and establish a workforce fund worth approximately A$68 million for workers displaced by the merger.

The agreement carries financial penalties for missed film commitments and provisions requiring the divestment of Miramax. An independent monitor will oversee compliance.

California Attorney General Rob Bonta said the agreement should not be interpreted as an endorsement of the takeover.

“Let me be clear: This settlement is not a vote of support for this merger.”

CNN and CBS face new oversight

The settlement also requires Paramount to establish a News Editorial Independence Board intended to protect journalism at CNN and CBS News.

For five years, negotiations with cable providers over Warner-owned channels must remain separate from those involving Paramount channels. The requirement addresses concerns that the combined company could use its larger portfolio to extract higher carriage fees.

Opponents argued the settlement offered insufficient protection against the merger’s effects. Martínez-Olguín nevertheless found the agreement a reasonable resolution of the dispute, rather than grounds to continue blocking the transaction.

What it means for Australia

The acquisition has a direct Australian connection through Paramount’s ownership of Network 10 and Paramount+. The company’s local business spans free-to-air television, digital viewing and subscription streaming.

Paramount said in September that it had secured the regulatory clearances required under the merger agreement across 68 countries, including Australia.

For Australian broadcasters, producers and distributors, the combination brings two major international content suppliers under common ownership. Paramount has said both studios will continue licensing films and television programmes to third-party platforms and buying content from external studios and independent producers.

Leadership takes shape ahead of closing

Paramount has also announced that Mattel chief executive Ynon Kreiz will join on October 5 and serve as co-CEO alongside David Ellison after the acquisition closes.

Kreiz’s appointment comes as the companies prepare to combine two of Hollywood’s five remaining legacy studios, along with their streaming services and television networks.

The court approval clears the path for that combination to proceed. The next step is completing the acquisition.