Paramount one step closer to $110bn Warner Bros merger after settlement with 12 states

Paramount has reached a settlement with California and other states that sued over the media giant's $110bn (£82.2bn) with Warner Bros Discovery.

The agreement clears a major hurdle to the proposed deal - announced earlier this year after Paramount beat out a bid from Netflix.

It includes independent editorial boards for the CNN ‌and CBS networks - as the merger would bring the rival news outlet under the same ownership - and a $30m (£22.4m) penalty ⁠per film ​falling short of the ​30-movies-a-year release ​target that Paramount has promised.

The settlement also states that Paramount must spend at least $300m on US film production compared to 2025. It's unclear whether that means cuts to foreign film production.

While Trump administration regulators cleared the deal for Paramount to absorb Warner Bros. Discovery (WBD), a coalition of 12 state ⁠attorneys general sued in July to block the merger.

'A stronger Hollywood' says Paramount head

Led by California's attorney general, the lawyers argued that the merger - mainly aimed at creating a bigger rival to the likes of Netflix - would substantially weaken competition in the US market, driving up prices for consumers and costing jobs.

A settlement with the states will help Paramount avoid a $7m-a-day (£4.4m) "ticking fee" it owes WBD shareholders for each day the deal does not close past 30 September.

California Attorney General Rob Bonta called the settlement "a strong antitrust ⁠outcome", adding: "More production, more choice, and guardrails that keep this industry competitive.

"I ⁠don't think these two companies should merge, but that's not something that we are focused on with our resolution here."

Concerns were raised that the deal would give US president Donald Trump more influence over CNN due to the possibility of Paramount head David Ellison and his father Larry, a longtime Trump associate, reorienting the network.

After the deal, Mr Ellison thanked the ​states and California Governor Gavin Newsom for his support and said: "Our goal has always been ​to build a stronger Hollywood."

It comes after CNN, MS NOW and Politico said they have notified Donald Trump's administration that they are filing a lawsuit over being denied White House access over the weekend.

Paramount snatched deal from Netflix

WBD's board first announced it was open to selling or partly selling the company in October 2025 after a summer of hushed speculation.

Back in June that year, WBD announced its plan to split into two companies: one for its TV, film studios, and HBO Max streaming services, and one for the Discovery element of the business, primarily comprising legacy TV channels that air cartoons, news, and sports.

More: Why was Warner Bros for sale?

After Netflix announced it had agreed a $72bn (£54bn) deal for WBD's film and TV studios on 5 December, Paramount launched a hostile bid - meaning straight to shareholders - with a $108.4bn (£81bn) bid several days later.

Paramount claimed to have tried several times to bid for WBD through its board, but said it launched the hostile bid after hearing of Netflix's offer because the board had "never engaged meaningfully".

Eventually, WBD accepted Paramount's offer of $110.9bn in February after Netflix withdrew.

US union concerned despite settlement

Another lawsuit against the merger - filed by the Writers Guild of America (WGA), also in California - was settled on Monday.

The union's east and west sectors filed a joint antitrust suit in July, arguing the joint entity "would have both the incentive and the ability to lower costs by suppressing writers' wages and reducing output".

"Writers will be paid less and have fewer employment opportunities", the WGA added.

While the union agreed to settle its claim, it said the deal will damage the industry, and that the earlier deal with the states forced it to "contend with the reality of forging ahead alone, with no backing from government.

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UK Culture Secretary Lisa Nandy also said in June she was "minded" to intervene in the merger over public interest concerns, but later said she would not so, due to the legally binding commitments provided to her by Paramount.

Sky News has contacted the UK's film and media union - BECTU - for comment on the settlement.

(c) Sky News 2026: Paramount one step closer to $110bn Warner Bros merger after settlement with 12 states