Twelve states, including Colorado, agreed to settle their lawsuits challenging Paramount's buyout of Warner Bros. Discovery, paving the way for the $81 billion merger to move forward with new commitments from the company.
Colorado Attorney General Phil Weiser joined a coalition of 11 other attorneys general in securing the settlement with Paramount Skydance Corporation, resolving the states' lawsuit alleging the merger would harm competition by lowering film output and raising prices.
The deal brings together two of Hollywood's oldest studios, key TV networks including CBS and CNN, and streaming platforms HBO Max and Paramount+.
Pending approval by the court, the agreement includes:
- A five-year, court-enforceable commitment to increase film output
- A minimum additional $1.5 billion commitment to bolster domestic film production
- A $47.5 million fund for workers impacted by the merger
- Restrictions on how the company handles cable negotiations to keep prices competitive
The new company also agreed to appoint an independent monitor to oversee compliance.
Weiser credited California Attorney General Rob Bonta, who led the states' case, for his leadership on the action.
"I thank California Attorney General Rob Bonta for his leadership of this important action to protect competition in the movie and cable TV industries. Today's settlement addresses concerns raised by the state AG coalition and will serve to protect movie goers and producers. We will continue to monitor the commitments made in this decree and ensure that we protect competition, creativity, and workers in these industries," Weiser said.
Annual film release commitment
Under the settlement, Paramount agreed to a five-year term requiring the merged company to release 30 films per year — including 20 wide releases — in the first two years, and 32 films per year — with 21 wide releases — in years three, four and five. Paramount also committed to releasing at least 4 independent films each year of the commitment period.
If Paramount fails to meet the film output requirement in any given year, the company must divest Miramax Studios and pay $30 million per missed film toward health care and retirement trust funds associated with the Writers Guild of America, the International Alliance of Theatrical Stage Employees, the Directors Guild of America, the International Brotherhood of Teamsters and other unions, as well as toward the Motion Pictures & Television Fund and the National Association of Attorneys General for additional antitrust enforcement.
Domestic production
Paramount agreed to spend at least an additional $1.5 billion over five years above its 2025 U.S. spending levels on domestic film production. Currently, around 5% of all Paramount production takes place in the U.S.
If a federal film tax credit of at least 20% is passed, production in the U.S. would need to increase to 20% of all film production in years one and two, and at least 30% in the remaining years. If a more expansive state film tax credit is also passed in either California or New York, production investment would need to increase to at least 40% of all film production being in the U.S. instead of overseas.
Independent film fund
The merged company will form and operate a fund for purchasing independent films, making an annual contribution of $5 million per year for a total of $25 million over five years.
Worker protections
The merged company committed $47.5 million in a Workforce Fund over five years for training and career development for workers displaced by the merger. The company must also honor previously established collective bargaining agreements and bargain in good faith with unions going forward.
Cable agreements
For five years, the merged company must conduct negotiations for Paramount basic cable channels independently from negotiations for Warner Bros. basic cable channels, preserving the existing competitive dynamic between the two companies. The merged company must also continue to offer a free streaming service, such as Pluto TV, and maintain its current service and quality.
In July, the coalition of attorneys general sued to challenge the merger of Paramount and Warner Bros., arguing the deal was illegal, likely to lessen competition and threatened viewers with higher prices, the decline of theatrical film releases and a reduction in the variety, quality and amount of content distributed.
The settlement still requires final approval by a court.
Weiser was joined in the settlement by the attorneys general of California, Arizona, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington.
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