Paramount settles state AG lawsuit, clearing last major obstacle to $111B Warner Bros. Discovery merger

Paramount Clears Last Obstacle to $111B Warner Bros. Discovery Merger

Paramount has reached a settlement with California's attorney general and a coalition of other states, removing what had become the final regulatory hurdle to its $111 billion acquisition of Warner Bros. Discovery. The deal can now proceed.

The agreement, announced Monday, requires the combined company to meet three conditions: establish an independent board of journalists to oversee editorial decisions at CNN and CBS News; commit to releasing at least 30 theatrical films annually; and spend an additional $1.5 billion on film production over five years. Notably, Paramount avoided structural divestitures. The company did not agree to sell CNN or spin off one of its movie studios.

California Attorney General Rob Bonta and other state officials had sued in July, arguing that combining Paramount and Warner Bros. Discovery would concentrate too much control over film studios, cable networks, and media properties in a single entity. The settlement addresses those concerns without dismantling either company.

Scale of the combined entity

Once the merger closes, the company will operate Paramount Plus, HBO Max, CBS, CNN, and franchises including Superman, Minecraft, and Sinners. The stacked subscription costs—HBO Max as a standalone service, Paramount Plus (which varies depending on add-ons like UFC), CBS All Access, and CNN's streaming offering—already total roughly $60 or more monthly for consumers paying across multiple services.

Paramount had warned throughout the acquisition fight that blocking the deal would force it to relocate significant production and thousands of jobs out of California. The company explored studio space in Nashville and made clear it saw California's regulatory environment as increasingly hostile. Governor Gavin Newsom publicly cautioned that losing Paramount would damage California's position as the center of the American entertainment industry.

With the lawsuit resolved, one of the more serious recent threats to Hollywood's California base has receded. The Paramount lot will remain a film production site rather than being converted to alternative uses like data centers—a possibility some had speculated about during the uncertainty.