Paramount settles with US states, clearing path for Warner Bros. merger

Paramount has reached a settlement with California and 11 other US states, removing a major legal obstacle to its planned $110 billion takeover of Warner Bros. Discovery. The agreement clears the way for one of the largest media mergers in years, after months of legal and political scrutiny.

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The deal would bring together major film, television and news assets under a single company. Officials said the settlement includes commitments on film production, jobs and editorial independence at CNN and CBS News. The transaction had already been approved by the Trump administration in June without changes to the business terms, but 12 states later sued to block it.

California led the challenge, joined by Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington. The dispute centred on concerns that the combined company could reduce film output, cut jobs in Hollywood and weaken editorial independence at CNN. The states argued the merged business would control roughly 27 percent of wide-release theatrical film distribution and a similar share of the basic cable channel market.

Paramount had also threatened to move out of California if the state attorney general did not negotiate an end to the lawsuit. The settlement matters because it removes a significant antitrust and regulatory hurdle from a deal with wide implications for the US media industry. The takeover would combine assets including Warner Bros.

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Pictures, CNN and the HBO Max streaming service, creating a company with substantial influence across entertainment and news. It also highlights the growing role of large-scale financing in media consolidation, including reported equity support from sovereign wealth funds in Saudi Arabia, Qatar and Abu Dhabi. Paramount is run by David Ellison, whose family has ties to US President Donald Trump, and the company won a bidding war against Netflix in February for control of the assets.

The financing reportedly also includes support and a guarantee from Larry Ellison, the billionaire founder of Oracle and David Ellison's father. The settlement suggests that the company has now addressed the main legal challenge raised by the states, even as broader concerns about concentration in media ownership remain. What remains unclear is whether any further legal or regulatory challenges could emerge before the takeover is completed.

It is also not yet clear how the promised safeguards on production, employment and newsroom independence will be enforced in practice. Investors, media workers and competitors will be watching for the next formal steps in the merger process and any response from the states that had opposed it.

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