Paramount Skydance has reached a settlement with California Attorney General Rob Bonta and 11 other US states over their antitrust lawsuit challenging the company’s proposed merger with Warner Bros. Discovery. The agreement, announced on September 21, 2026, removes a major legal obstacle to the proposed merger, although it still requires court approval.
The lawsuit was filed in July by a coalition of 12 state attorneys general. The states had argued that combining Paramount and Warner Bros. Discovery could reduce competition in the entertainment industry and potentially affect movie production, cable television and consumers. A federal court had previously issued a temporary order preventing the merger from moving forward while the legal dispute was being considered.
Under the new settlement, the combined company will be required to maintain a minimum level of film production for five years. It must release at least 30 films a year during the first two years and 32 films a year during the following three years. The agreement also includes requirements for independent film releases.
Paramount has also committed to spending at least an additional $1.5 billion on US film production over five years, compared with its 2025 spending levels. The agreement is intended to support domestic production and maintain activity in the American film industry.
The settlement includes a $47.5 million workforce fund to support training and career development for workers who may be affected by the merger. The company has also agreed to honour existing collective bargaining agreements and negotiate with unions in good faith.
The agreement also places conditions on cable television negotiations. For five years, Paramount’s basic cable channels and Warner Bros.’ basic cable channels must be negotiated separately. The companies must also continue offering a free streaming service similar to Pluto TV under the settlement terms.
Another condition involves news operations. The merged company will establish a News Editorial Independence Board intended to help protect editorial independence at CBS and CNN. An independent monitor will also oversee compliance with the settlement.
Bonta said the settlement resolves the states’ antitrust concerns, but he also made clear that the agreement does not represent support for the merger itself. The settlement instead establishes conditions that the states believe address the concerns raised in their lawsuit.
The agreement clears a significant legal hurdle for Paramount Skydance as it seeks to complete its takeover of Warner Bros. Discovery. However, the settlement remains subject to approval by the court, so the legal process is not completely finished.
The proposed transaction would bring together major Hollywood assets, including Paramount’s film and television operations with Warner Bros. Discovery’s Warner Bros., HBO and other entertainment businesses. The settlement now provides a framework for the companies to move toward the next stage of the transaction while operating under several court-enforceable conditions.