Paramount Skydance-Warner Bros. Discovery Merger to Proceed After Antitrust Settlement

Paramount Skydance's $110 billion merger with Warner Bros. Discovery will move forward as the company plans to settle with a group of state attorneys general that sought to block the deal on antitrust grounds, multiple reports Monday said.

The lawsuit, brought by a group led by California's Rob Bonta, was previously set to head to trial in March and would have left the deal in limbo through mid-2027.

Details of the agreement have yet to be made public. However, sources told Reuters that the settlement includes the creation of independent editorial boards for CNN and CBS and also stipulates a $30 million penalty per film if Paramount falls short of its pledge to release 30 movies annually.

Spokespeople for Paramount and Bonta did not immediately respond to requests for comment.

The acquisition would bring together two storied film studios, Paramount and Warner Bros. Discovery; a portfolio of TV networks; broadcast network CBS; and two popular streaming services in Paramount+ and HBO Max.

The deal previously won approval from U.S. and other international regulators, and Paramount had told investors it expected to close the deal by Sept. 30.

However, California and 11 other states filed suit in mid-July seeking to block the merger, citing antitrust concerns in film and pay TV.

In the weeks that followed, Paramount agreed to delay the merger until June 2027 while the legal challenge played out. That delay would have proven costly for Paramount.

As part of the merger agreement, Paramount agreed to a so-called ticking fee that would have kicked in after Sept. 30 and meant an additional 25 cents per share, per quarter to WBD shareholder until the transaction closed. The fee would have added an estimated $650 million per quarter in cash value to the deal.