Paramount Skydance has reached a settlement with a coalition of 12 U.S. state attorneys general, resolving their antitrust challenge to the company’s proposed $110 billion acquisition of Warner Bros. Discovery. The agreement removes one of the final major obstacles to the media merger and could allow the transaction to move toward completion after months of regulatory and legal scrutiny.

Settlement Addresses States’ Antitrust Concerns

The states had challenged the merger on the grounds that combining Paramount and Warner Bros. Discovery could weaken competition, reduce film output and potentially lead to higher prices for consumers. The settlement addresses those concerns through a series of legally enforceable commitments covering film production, cable distribution and corporate oversight.

The agreement is still subject to approval by the court. However, it significantly changes the legal position of the proposed merger, particularly after regulators in numerous jurisdictions had already cleared the transaction. Paramount had argued that the combination would create a stronger competitor in a media industry facing structural pressure from streaming and changing consumer behavior.

Paramount Commits Billions to Domestic Film Production

Under the settlement, the merged company will invest an additional $300 million per year in domestic film production for five years, resulting in at least $1.5 billion of additional investment. Paramount must also produce at least 30 theatrical films annually during each of the first two years following the merger and 32 films annually during the next three years.

The agreement sets additional requirements for wide-release films, which are distributed to at least 2,000 movie screens. Failure to meet the production commitments could trigger payments of $30 million for each film below the annual requirement. Continued failure to meet key obligations could also result in the sale of Miramax.

Paramount will also provide a $47.5 million fund for workers affected by the merger. In addition, the company has agreed not to sell or close the Paramount or Warner Bros. studio lots in the Los Angeles metropolitan area for at least five years.

CNN, CBS and Cable Distribution Face New Oversight

The settlement extends beyond Hollywood production. Paramount will be required to negotiate separately for five years over the distribution of its basic cable channels and those owned by Warner Bros. Discovery, rather than immediately combining the two companies’ negotiations with distributors.

The agreement also calls for an independent board designed to support independent, objective and fact-based journalism at CBS News and CNN. A five-state committee will monitor compliance with the settlement, adding another layer of oversight once the merger moves forward.

Investors will now focus on the court’s review and the remaining steps required to close the acquisition. Paramount shares were largely unchanged following the settlement announcement, while Warner Bros. Discovery shares rose sharply, reflecting the reduced regulatory uncertainty. The longer-term focus will shift toward integration, cost savings, content strategy and the ability to meet the settlement’s production and governance requirements. The transaction’s financial impact will ultimately depend on whether Paramount can combine the businesses efficiently while maintaining the competitive and operational commitments imposed by the agreement.