Paramount Skydance has settled the antitrust lawsuits standing between it and a $110 billion acquisition of Warner Bros. Discovery, removing the last major legal obstacle to one of the largest media mergers in history.
The company reached agreement Monday, September 21, with a coalition of state attorneys general led by California's Rob Bonta, resolving a suit filed roughly two months earlier that sought to block the deal on antitrust grounds. A dozen states joined the litigation. Separately, the Writers Guild of America East and West announced their own settlement the same day, ending a parallel legal challenge the union had pursued after failing to stop the merger through other means.
The settlements cap a monthslong regulatory gauntlet for Paramount, which agreed to acquire Warner Bros. Discovery in a deal signed February 27, 2026. The merger would combine two of Hollywood's oldest studios, the broadcast network CBS, a wide portfolio of cable channels, and two major streaming services, Paramount+ and HBO Max, into a single company.
What the states secured
According to California Attorney General Rob Bonta, the settlement with the states includes a financial penalty structure tied to a production commitment Paramount Skydance CEO David Ellison made when pursuing the deal: a pledge to produce 30 films per year. Bonta said the agreement carries a $30 million penalty per film if the company falls short of that target, with 90 percent of any penalty funds directed to workers. The settlement also includes a provision that would require Paramount to divest its production company, Miramax, if it fails to meet the release goal, Bonta said.
The agreement further requires Paramount and Warner Bros. to continue negotiating cable distribution packages separately rather than as a combined entity, according to reporting on the settlement terms.
Trade outlet Deadline, citing a proposed consent decree, reported additional terms not confirmed by other outlets: a $1.5 billion commitment to domestic film production and job creation, further production requirements contingent on federal tax incentives, and a $47.5 million workforce development fund. Deadline also reported the settlement includes what it described as "CNN guardrails" and a requirement that the news network and the film studios operate as separated units for a period of time. Those specific figures and provisions should be treated as reported by a single source pending confirmation elsewhere.
The Wall Street Journal reported, per Deadline's account of that reporting, that Paramount will not be required to sell off its cable networks as part of the settlement — a concession that had been a point of concern for critics of the deal who worried about consolidated ownership of news and entertainment properties. That claim is relayed through a single reporting chain and has not been independently confirmed by other outlets reviewed for this story.
The Writers Guild settlement
The WGA's agreement with Paramount is separate from the states' settlement and addresses different concerns. In a statement Monday, the union said it had agreed to end its lawsuit in exchange for a commitment from Paramount to prohibit writer layoffs at CBS News Broadcast for five years, along with a payment of $17.5 million to the union's health fund and coverage of the WGA's attorneys' fees from the litigation. Those specific dollar figures and terms come from the WGA's own statement and had not, at the time of this report, been independently verified through a second source.
The union was direct about the outcome. "We were not successful in blocking the merger," the WGA said in its statement, adding that its legal effort had nonetheless drawn attention to concerns about the broader trend of media consolidation.
The WGA's decision to settle came directly after the states' agreement was reached. With government enforcers no longer backing the case, the union said pursuing an antitrust trial alone would have required millions of dollars in legal costs with no assurance of success.
Why the deal stalled — and why it's moving now
Paramount's pursuit of Warner Bros. Discovery followed closely on the heels of Skydance Media's roughly $8 billion acquisition of Paramount itself, a deal that gave David Ellison control of the company after buying out Shari Redstone's controlling stake. Ellison then moved aggressively to pursue Warner Bros. Discovery, arriving at a signed merger agreement in February.
The path to closing has run through a lengthy set of regulatory reviews. Paramount has said that regulators and governments in 65 jurisdictions — including the European Commission and antitrust authorities in the United States, Germany, France, China, Canada, Brazil, Australia, South Korea, Saudi Arabia and South Africa — have either cleared the transaction or declined to challenge it on competition or foreign investment grounds. The waiting period under the U.S. Hart-Scott-Rodino Act, which governs federal antitrust review of large mergers, has also expired, meaning there is no remaining federal legal barrier to closing in the United States.
The state lawsuit was the most significant outstanding obstacle. It also carried a financial deadline: under terms tied to the merger agreement, Paramount owed Warner Bros. Discovery shareholders a fee of roughly $7 million for every day past September 30 that the deal remained unclosed. Settling with the states before that date removes the risk of accumulating those daily penalties and avoids a legal process that, unresolved, threatened to push closing into mid-2027.
David Ellison characterized the settlement as a full resolution of the company's remaining legal exposure. "We have complete clearance for this merger," Ellison said following the announcement. In an internal memo to employees, he said the company was aiming to close the transaction within roughly two weeks.
Market reaction and scale of the deal
Financial markets responded quickly to news of the settlement. Paramount Skydance shares jumped as much as 10 percent in midday trading Monday before paring gains to close down roughly 3 percent. Warner Bros. Discovery shares rose about 11 percent on the news.
Paramount has defended the deal's scale against antitrust concerns by pointing to its share of the overall entertainment market. In public filings, the company has argued that even combined, Paramount and Warner Bros. Discovery would account for approximately 13 percent of total U.S. television and streaming viewing time, roughly 18 percent of domestic box office receipts over the past 12 months, and about 22 percent on average over the past two years — figures the company says put it well behind larger competitors including Netflix, Amazon and Apple in the broader streaming and entertainment landscape.
Paramount is controlled by the family of Oracle co-founder Larry Ellison, a major Republican donor and ally of President Trump; David Ellison, Larry's son, runs the company day to day. That ownership structure has drawn scrutiny from critics who have raised concerns about potential influence over news coverage at CBS News and CNN once the merger closes, given the elder Ellison's political ties. Paramount has not publicly addressed those concerns in connection with Monday's settlement.
What happens next
With the state lawsuit and the WGA's litigation both resolved, the remaining steps to closing are largely procedural. The settlement agreements are subject to court approval, and Paramount has indicated it intends to move toward finalizing the transaction in the near term. Once completed, the deal will formally bring together Paramount's film and television operations with Warner Bros. Discovery's portfolio, including Warner Bros. Pictures, HBO, CNN, and the Discovery cable networks, under a single corporate parent.
The Clarke Standard will continue to follow the closing process and any additional terms disclosed as the settlement documents become public.
