The potential settlement between Paramount and a coalition of 12 state attorneys general regarding the merger with Warner Bros. Discovery is not yet finalized. U.S. District Judge Araceli Martinez-Olguin has raised several “outstanding questions” that need to be addressed before the settlement can be legally approved.
Judge’s Order and Upcoming Hearing
In an order released on Tuesday, Judge Martinez-Olguin granted a motion to vacate a hearing that was set for September 24 concerning a previous motion by Paramount that required the states and the Writers Guild of America (WGA) to post a $1.88 billion bond. This bond was intended to cover potential financial losses if Paramount succeeded in court. The current proposed settlements make this motion unnecessary.
However, the judge specified that the court has not yet ruled on the remaining aspects of the motion related to the consent decree and the stipulation against closing the Paramount-Warner Bros. merger. Consequently, a new hearing has been scheduled for 11:00 a.m. PST on September 24, 2026, which will occur via Zoom. The purpose of this hearing is to clarify the factual and legal foundations of the proposed consent decree as well as its implementation.
Settlement Highlights
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Recently, it was announced that Paramount’s settlement with the states leaves only the judge’s approval of the proposed consent decree as the final step for the merger to proceed. In a memo to its staff, Paramount CEO David Ellison expressed optimism that the approval could be finalized within approximately two weeks.
The lawsuit initiated by California Attorney General Rob Bonta and the other AGs contended that the merger would grant excessive power to the combined entity in markets for wide-release and “tentpole” theatrical films, as well as basic cable services. While Bonta had previously indicated that “structural” remedies like divestitures would be necessary to resolve the lawsuit, the resulting settlement does not include such measures.
Commitments Under the Proposed Settlement
Key terms of the settlement require Paramount to maintain ownership of both the Paramount Studios and Warner Bros. lots for at least five years. Additionally, the company is obligated to invest a minimum of $300 million annually into U.S. film production, totaling $1.5 billion over the next five years. The merged entity will also be required to release at least 30 films for theatrical distribution in the first two years and at least 32 films in years three to five, with a guaranteed 45-day window for wide-release films. Furthermore, a “news editorial independence board” will oversee Paramount-Warner Bros.’s operations, establishing editorial and journalistic principles for outlets like CNN and CBS News.
The terms of the settlement are set to last until the end of the fifth calendar year following the closing of the merger, meaning that if the merger proceeds as anticipated by the end of this year, the commitments will remain in effect through December 31, 2031.
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As of now, Paramount has declined to comment on the ongoing proceedings, and inquiries to the office of Attorney General Rob Bonta have not received an immediate response.
