Paramount Settlement Clears Way for Warner Megadeal

State attorneys general have settled their lawsuit seeking to block Paramount’s acquisition of Warner Bros. Discovery, clearing the last major legal hurdle for a merger that would combine two Hollywood studios, two streaming services, CBS, and CNN.

California Attorney General Rob Bonta, who led the 12-state coalition, announced the deal Monday at a Los Angeles news conference. Warner Bros. Discovery CEO David Zaslav told staff the companies expect the merger to close no later than early October, though the exact date is not yet set.

In exchange for the states dropping the antitrust case, Paramount agreed to a package of conditions. It must release 30 films a year in theaters and create a News Editorial Independence Board “to support CBS News’ and CNN’s continued editorial independence” and “ensure independent, objective, fact-based reporting,” Bonta said.

That board must be in place within 180 days of closing. It will have five “established journalists,” active or retired, each with at least 10 years of experience. Paramount’s board of directors will appoint the members, and no more than two may be affiliated with the same political party. The panel is charged with resolving disputes over “alleged reporting bias or failure to meet agreed reporting fairness standards” and with monitoring “editorial independence, including from… ownership and shareholders.”

The combined company would join Paramount’s film and television studios, CBS, and Paramount+ with Warner’s studios, HBO, CNN, and other cable networks. The settlement would allow Paramount CEO David Ellison and his father, Oracle co-founder Larry Ellison, to sharply expand their media holdings.“Our goal has always been to build a stronger Hollywood — one with more stories told, greater choice for consumers and stronger competition,” David Ellison said. He thanked Bonta and the other attorneys general for “engaging in good faith to find a path forward.”