Paramount's acquisition of Warner Bros. Discovery has cleared its last major obstacle, as an antitrust lawsuit filed by 12 states ended in a settlement approved by a U.S. federal court, paving the way for the merger to close shortly.
A federal court on the 30th approved a settlement between the two sides in the antitrust suit brought against Paramount by attorneys general from 12 states, led by California, The Wall Street Journal reported. The European Union granted conditional approval of the merger in July, making the U.S. court ruling the final gateway for the deal. Paramount said it now expects the transaction to be completed on October 6.
The combination of two of Hollywood's oldest studios hands Paramount a sprawling entertainment empire spanning major franchises such as Harry Potter, the DC superhero series and Game of Thrones, as well as cable channels including CNN and Cartoon Network.
Thirty Films a Year for Five Years: Inside the Conditions
The 12 states led by California, along with the Writers Guild of America, filed the antitrust suit against Paramount in July. The attorneys general argued that combining Paramount and Warner would create a monopoly in the markets for theatrical films and TV channels, while the WGA warned that merging two of the largest players would reduce jobs for screenwriters.
In response, Paramount agreed to invest at least an additional $1.5 billion in content production in the United States over five years, release at least 30 films a year and provide funding for workforce training programs in the entertainment industry. If it falls short of the production target, Paramount must sell its stake in Miramax, one of its core film units, and pay $30 million (about 40.8 billion won) for each film below the threshold.
Warner and Paramount must also negotiate separately with cable operators over channel distribution. The requirement reflects concerns that the combined company could use popular channels such as CNN, MTV and HBO to force bundled deals on cable operators. If the two companies fail to keep those negotiations separate, they must divest some cable channel subsidiaries.
The companies also agreed to establish an editorial committee of five journalists within 180 days of the merger's completion. The committee will have authority to mediate disputes among CBS News and CNN staff over violations of editorial principles, bias in coverage and fairness. The provision follows concerns about concentrated influence over public opinion once CNN and CBS come under one roof. Those concerns are sharpened by the fact that Paramount Chief Executive David Ellison is the son of Oracle founder Larry Ellison, a billionaire and close ally of U.S. President Donald Trump, raising suspicions that the Ellison family could intervene in coverage of the Trump administration.
Mattel CEO Behind 'Barbie' Film to Co-Lead Merged Company
Ynon Kreiz, chief executive of toymaker Mattel, has been named co-CEO of the combined Paramount-Warner company. Kreiz is a veteran of the media and entertainment industry, with stints at television production companies and gaming firms. He later moved to Mattel, where he is credited with transforming the toy manufacturer into an entertainment company spanning film, television and games.
He also brings experience in restructuring large companies, having scaled back production sites and cut more than 2,000 jobs since taking the helm at Mattel in 2018. The merger will leave Paramount with about $80 billion in debt. The company has told investors it expects to achieve annual synergies of $6 billion within three years of the merger. Kreiz is expected to carry out restructuring to meet those targets.
Separately, Casey Bloys, who oversees content at Warner's HBO and HBO Max, is expected to lead the combined company's streaming business.
