Paramount Settles Lawsuit With US States, Clearing Way for $110bn Warner Bros Merger

In September 2026, Paramount Skydance settled a lawsuit with a dozen US states, clearing one of the final hurdles for its $110bn (£82.8bn) merger with Warner Bros Discovery. According to the BBC, the agreement paves the way for a transaction set to reshape Hollywood, combining legacy studios, major streamers and national networks.

States' position and production commitments

The legal push was led by California alongside a coalition of state attorneys general from Arizona, Colorado and New Jersey. California Attorney General Rob Bonta announced the settlement and stressed that the agreement was "not a vote of support for this merger".

Under the agreement, Paramount must release at least 30 films each year and ensure that 20% of all film production takes place in the US for the first two years, rising to over 30% over the following three years. To prevent the quota being met with low-budget or automated content, the settlement includes strict guardrails against AI-generated films; Bonta said officials wanted to guarantee "real, robust movies" that generate economic activity and put people back to work.

• If Paramount fails to meet its annual production quota, it will be forced to sell its 49% stake in Miramax, the film company founded by disgraced Hollywood mogul Harvey Weinstein and his brother Bob.
• Bonta said the settlement would deliver "$300m to $1.5bn more, at minimum, for film and TV production right here in our country", adding: "Importantly, that is the baseline. That is the minimum."
• Production commitments could surge by up to 700% if Congress passes a federal film tax credit.
• Paramount has agreed to the appointment of an independent monitor to oversee ongoing compliance with the settlement.

Editorial independence and the writers' guild

Paramount has also promised to create an editorial independence board to oversee CBS News and CNN, the news network owned by Warner Bros Discovery which was recently banned from the White House by President Donald Trump. The board must be set up within 180 days of the merger completing and include five acting or retired journalists with at least a decade of experience. It will resolve disputes between CBS News and CNN employees and management of the combined entity regarding alleged reporting bias or failure to meet agreed reporting fairness standards.

The Writers Guild of America (WGA) settled its own lawsuit, saying that as a non-profit it could not afford to fight the merger alone without government support, although it continues to believe the deal "will cause damage to writers and the industry at large". Paramount will pay $17.5m into the WGA health fund and cover legal fees, and the agreement prohibits writer layoffs at CBS News Broadcast for five years.

Company reaction

Paramount's chair and chief executive David Ellison welcomed the resolution, saying that after state attorneys general and WGA concerns were addressed, "we have complete clearance for this merger and look forward to putting these commitments into action". He added: "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." Ellison hosted a dinner for President Trump earlier this year, and in an August op-ed for the New York Times wrote that "journalists will continue to answer to the facts and to all the people they serve - not to any party or cause". He previously indicated the merged company would keep its headquarters in California "for the foreseeable future", though Bonta clarified the commitment "was not written into the legal agreement" — "It's not part of the deal" — and noted Ellison had earlier threatened to move studio operations out of California.

Not everyone in the industry is convinced. Ned Thorne, an LA-based film editor, described the merger as "a little unsettling": "When two giant companies consolidate into one it's never a totally positive thing because of the merger and cost cutting."

Company details

• Company: Paramount Skydance
• Chair and chief executive: David Ellison
• Merger partner: Warner Bros Discovery (owner of CNN)
• Deal value: $110bn (£82.8bn)
• Headquarters: California, according to Ellison's stated intention (not written into the legal agreement)
• Website: paramount.com