That’s All? Team Paramount Nabs Warner Bros. With Only Minor Concessions to States

After all of that sound and fury, that’s it? “I don’t think these two companies should merge,” said California attorney general Rob Bonta in unveiling a “significant” settlement with David Ellison to allow the mogul to do just that with Paramount and Warner Bros. Discovery.

Paramount’s C-suite must have been popping bottles of champagne as the press office engines of the major studio and 12 state attorney generals typed up the settlement term boilerplate language of what ended up being a stern finger-wave to Ellison’s team.

When Bonta held his presser on Monday he made a point to note multiple times that he personally was not in favor of the merger while rattling off that Paramount would invest $1.5 billion in domestic production over five years, Paramount and Warner Bros. need to keep their studio lots as is in Los Angeles, there’d be no cable channel divestments and CBS News and CNN would have independent editorial boards. The studios also need to invest $9.5 million a year in workforce training and career development in film and TV production communities. And it’ll start a $5 million annual fund to bankroll indie movies.

A five-year commitment for 30 films does up the three-year pledge Ellison had earlier signed on to. And if the studios fail to meet that threshold, they would be hit with a $30 million penalty per film under that 30-film limit. Bonta says that $1.5 billion figure represents $300 million more annually than the combined studios spent last year. In the fine-print consent degree, there’s a lot of rules-of-the-road language on potential divestitures (like selling, say, Miramax Studios) if Paramount fails to follow through on its commitments, but the commitments themselves don’t appear to be that high of a bar to achieve.

Now the 43-year-old Ellison can go about the business he was ready to begin a year ago when he took Paramount off of Shari Redstone’s hands and paired it with his own company Skydance Media. At the time, he said he wanted to run Hollywood studios for the next two decades while pushing them toward a vaguely tech-driven future where entertainment giants can slug it out with the major platforms in the attention economy. That entire narrative went on pause as Ellison put a pin in telling the story of his Paramount overhaul and pushed all of his chips in to chase Warner Bros. Discovery.

To his credit, he’s been counted out more than a few times along this rollercoaster ride. But it didn’t hurt having a father, Oracle mogul Larry Ellison, who’s worth around $200 billion and holds the keys to TikTok’s U.S. subsidiary, to backstop his chase. That allowed him to keep the focus on acquiring the entire Warner Bros. Discovery (yes, including those cable channels like CNN, HGTV and Food Network that would’ve been spun out), even if Warners honcho David Zaslav was hoping to hold two auctions instead of one.

Despite Ted Sarandos and Netflix closing a deal and touring the Warner Bros. lot in December, Ellison ultimately outlasted his rivals by upping the price, forcing the Warners board to concede that in dollar figures Paramount offered the better deal. Then he wooed Donald Trump’s administration to speed along the deal in the U.S. and courted governments abroad to greenlight his $111 billion merger with minor concessions made.

Throughout all the global regulatory scrutiny, Paramount’s arguably biggest compromise abroad was to exit a distribution joint venture with Universal in order to win European Union approval. This likely did not keep up Team Paramount at night. The Brendan Carr-led FCC, which has been warring with Disney, just waved through last week a flotilla of Middle East sovereign wealth funds as backers of the megamerger.

Then came Rob Bonta and the California attorney general’s posse of 12 states who filed suit in July with plans to block the deal, as the last obstacle. The states had argued that Paramount’s devouring of Warner Bros. Discovery was a monopoly concern (the Writers Guild, in its own suit, brought up the monopsony issues — i.e. one fewer buyer for scripts around town, one less place to shop a project to, etc.)

And for a time it seemed like the states had leverage, especially in getting a court to push back an antitrust trial over the deal until March 2027, dragging out the sale process and igniting all that talk about the $7 million-per-day ticking fee that Paramount would have to pay starting in October. On Monday, Bonta said sometimes you win, sometimes you lose in court and says that the solution that his office is presenting addresses antitrust concerns.

So what did Rob Bonta and his coalition end up securing from this fight? The AG has been on a media blitz vowing not to strike a deal unless there’s real “structural remedies.” That has played into the hopes of the Hollywood notables who’ve campaigned against the merger, call it the Jane Fonda wing of the industry. Fonda herself bemoaned the megadeal this way: “As a creative, the fewer studios there are, the fewer places that we can take our products. We lose bargaining power. Unions lose their power. There’s a very robust and growing movement to stop the mergers.” She added, “It’s sad for me because I like David Ellison very much,” noting that Skydance had financed Grace and Frankie on Netflix.

That sort of measured logic is what you’d hear all across town since July. And that’s why, perhaps, the Fonda wing of Hollywood that represented the “Block the Merger” voices would be disappointed with what Bonta eventually showed up with. The remedies that the AG discussed for Paramount were more behaviorial, arguably, than structural. Bonta made a reference to how this deal would be more closely monitored than when Disney devoured Fox during the first Trump administration.

But the guardrails also seem like they may not alter what Ellison’s team was already planning for. On the 30-film a year number, for example, Warner Bros. distributed 11 wide release movies in 2025 while Paramount put out 10 features, per an economic report published by Los Angeles County in June, but both studios had been expected to increase output regardless given the industry pivot by studio executives away from COVID-era thinking that gave streaming-only releases for coveted titles.

Does an independent oversight board matter for CBS News and CNN when the goal, likely, for those news outlets is not adding or changing their editorial focus but could be cost savings and synergies, which could lead to fewer overall reporting resources.

While the deal terms are not about Bonta, surely the AG realizes that his reputation in Hollywood was on the line too. And what he just announced — which will be cheered by many pro-deal advocates (including Paramount and WBD shareholders and the major theater chains) — doesn’t align with the stark terms that he framed his own legal battle against Paramount just a few short months ago.