Paramount Settles Antitrust Case With State AGs, Removing Obstacle to Warner Bros. Deal

Paramount has reached a deal with 12 state attorneys general that removes a major obstacle to closing its acquisition of Warner Bros. Discovery.

The deal comes just before the company was to begin accruing a $7 million daily “ticking fee” on Oct. 1, which was seen as an important milestone in the case. Bloomberg was first to report the news, followed by the Wall Street Journal. A source also confirmed to Variety that the deal is done.

The merger was on hold pending the outcome of the states’ antitrust lawsuit, which was set for a trial on March 2, 2027. The $111 billion merger is the largest in Hollywood history.

Details of the agreement have yet to be made public. But the two sides spent the weekend in tense discussions over Paramount’s commitments to remain in California and over its production levels. The discussions also focused on editorial oversight of CBS and CNN, a key concern for East Coast attorneys general.

California Attorney General Rob Bonta led the 12-state coalition, which sued to block the deal despite prior approval from the U.S. Department of Justice. Judge Araceli Martinez-Olguin granted a 28-day restraining order later that month, finding that the states had put forward a strong case that the deal would harm competition in the basic cable and theatrical markets.

Paramount then agreed to pause the transaction until a trial on the merits, rather than fight a motion for a preliminary injunction. The states argued that the merger would lead to higher prices and fewer options for theaters and cable and satellite providers, who would in turn pass on higher costs to consumers.

Paramount has argued all along that the deal is pro-competitive and will result in more content production as the company seeks to take on streaming giants like Netflix and Amazon.

In recent weeks, Paramount has sought to ratchet up the pressure on Bonta to abandon the case, including by threatening to leave California and move to Texas or Tennessee. Paramount has also enlisted state Democratic lawmakers to urge Bonta to settle, while IATSE and the Directors Guild of America have also pushed for a deal.