California and other states have reached a settlement with Paramount to allow its merger with Warner Bros. to proceed. The agreement follows a lawsuit filed in July by twelve states, which had temporarily delayed the deal after a federal judge indicated the merger would likely violate antitrust laws.
The combined entity will carry approximately $80 billion in debt. Under the settlement terms, Paramount has committed to distributing 30 films annually in theaters, with financial penalties for non-compliance. Additionally, the company will establish independent editorial boards for CBS and CNN.
The settlement faced criticism from advocacy groups like Free Press and Public Knowledge, who argue it fails to address the loss of market competition. Critics claim the merger will lead to higher consumer prices, reduced streaming options, and fewer employment opportunities for creative professionals.
The deal was previously approved by the Trump administration's Justice Department in June. The Federal Communications Commission recently permitted Paramount to finance the acquisition through equity stakes sold to sovereign wealth funds from Saudi Arabia, the United Arab Emirates, and Qatar.
Initially, Massachusetts, New York, Connecticut, and Minnesota opposed the settlement but conceded after California withdrew its leadership in the legal challenge. Reports indicate that Netflix previously considered acquiring Warner Bros. but withdrew due to the administration's preference for Paramount.
