Paramount has settled with California and 11 other states that sued to block its planned $110 billion acquisition of Warner Bros. Discovery, removing a major legal obstacle to the proposed media merger.
Under the proposed consent decree filed with the court, the combined company would have to meet several commitments related to movie production and theatrical releases. Paramount would be required to release at least 30 theatrical films in each of the first two years after the deal and 32 films in subsequent years over the five years. It would also have to spend at least $300 million more on U.S. production than the companies spent in 2025.
At least four of those movies must be independent productions, while at least 20 percent must qualify as tentpole films, meaning movies with budgets of more than $50 million that are released on at least 3,000 U.S. screens during their first month.
The agreement also includes penalties if Paramount fails to meet the film release requirements. The company would have to pay $30 million for each missed film and could be required to sell Miramax Studios if it fails to meet the commitments.
The settlement would also require the merged company to continue operating a free streaming service similar to Pluto TV. Paramount and Warner Bros. would also be prohibited from selling their California studio lots for at least five years.
Additional conditions cover negotiations involving the combined company’s cable networks. The agreement also calls for a five-member editorial independence board made up of journalists with at least 10 years of experience. The board would oversee editorial independence at CBS and CNN.
The Writers Guild of America has also settled its antitrust lawsuit against Paramount, removing another legal challenge to the proposed merger.
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The settlement still forms part of the legal process surrounding Paramount’s planned acquisition of Warner Bros. Discovery, but it removes a significant challenge from the states that had sought to stop the deal.
