Paramount Skydance Corp. reached a settlement with the states seeking to block its proposed takeover of Warner Bros. Discovery Inc., clearing the way for a historic Hollywood merger.
California Attorney General Rob Bonta led a group of state attorneys general who filed a lawsuit challenging the massive $111 billion deal that was initially expected to close during the third quarter of this year. On Monday, Paramount announced that a deal had been reached.
“Our shared aim was an outcome that best serves consumers, workers and — most importantly — the creative community so vital to the art of visual storytelling. We’re confident this agreement does exactly that, memorializing a series of commitments that include 30+ films annually and expanded U.S. film production to help revitalize our industry here at home,” Paramount CEO David Ellison said in a statement.
PARAMOUNT-WBD MERGER ON HOLD AFTER JUDGE GRANTS TEMPORARY RESTRAINING ORDER
“Our goal has always been to build a stronger Hollywood — one with more stories told, greater choice for consumers and stronger competition. That vision was validated by unanimous approval from competition authorities in nearly 70 jurisdictions worldwide, who agreed this deal is pro-competitive, pro-consumer and pro-worker,” Ellison continued. “Having now addressed the State AGs’ and WGA’s concerns, we have complete clearance for this merger and look forward to putting these commitments into action. Bringing Paramount and Warner Bros. Discovery together will build that stronger Hollywood, creating expanded opportunity for our people and even more great entertainment for audiences around the world.”
Bonta also confirmed the deal during a Monday press conference.
“This settlement is not a vote of support for this merger; it is not a blessing of the broader merger,” Bonta said.
“I am always willing to come to the table for honest, good-faith negotiations, and when we can find a strong solution that protects competition and consumers, I’d rather resolve the case, the issue, in the boardroom instead of the courtroom,” Bonta added. “That’s what happened here.”
Bonta said Paramount has made an “enforceable commitment to significantly increase domestic production,” producing at least 30 movies in each of the first two years of the deal, followed by 32 movies per year in the following three years. Each year, at least four of those titles must be independent and at least 20% must be blockbusters. Bonta said this will result in Paramount spending $1.5 billion “at minimum” over five years on domestic movies.
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If Congress passes the federal film tax credit, Paramount has agreed that 20% of all film production must be in the U.S. for the first two years and then 30% for the following three years. Paramount will also establish a news editorial independence board to support CBS News and CNN.
Bonta said a trustee will be selected to monitor Paramount’s compliance with these terms.
“I want to stress what this settlement means; more production here at home and more means more work here in California,” Bonta said.
The Justice Department (DOJ) announced earlier this year that it has closed its antitrust investigation into Paramount Skydance’s proposed acquisition of WBD, concluding the transaction is not likely to harm competition or American consumers.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| PSKY | PARAMOUNT SKYDANCE CORP. | 9.91 | -0.30 | -2.94% |
| WBD | DISCOVERY INC. | 30.80 | +3.00 | +10.79% |
The Antitrust Division said its eight-month review examined more than 2 million documents and found the deal could strengthen competition across the media and entertainment industry, including in streaming video, traditional television and theatrical film distribution. However, state attorneys general retain independent authority under antitrust laws.
Ellison, the son of billionaire Oracle co-founder Larry Ellison, took control of Paramount last year when Skydance Media and Paramount Global completed an $8 billion merger. Adding WBD to his portfolio would make the younger Ellison one of Hollywood’s most powerful people.
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