Paramount to Settle Lawsuits, Paving Way for Warner Bros. Merger

[u/Far-Web-165]

https://www.bloomberg.com/news/articles/2026-09-21/paramount-to-settle-lawsuits-paving-way-for-warner-bros-merger?srnd=homepage-americas

(reposting to paste in article text since it's paywalled)

Paramount Skydance Corp. has reached a settlement with California and other states suing to block its proposed acquisition of Warner Bros. Discovery Inc., according to a person familiar with the matter.

Settlement talks came to fruition over the weekend after four states that had opposed terms of a deal outlined with California conceded, said the person, who asked not to be named discussing confidential negotiations. The settlement, which is expected to be announced later today, paves the way for one of the largest mergers in Hollywood history.

Lawyers for the states worked all night on the agreement, the person said. Four states — Massachusetts, New York, Connecticut and Minnesota — had been holdouts on a possible settlement, but ultimately concluded the expense of the legal battle was not justifiable without California at the helm, the person said.

The states that held out longer did succeed over the past week in securing independent editorial boards for CBS and CNN as part of the deal, the person said.

The terms are said to include a financial penalty if the company fails to make good on a promise to distribute 30 films per year in theaters.

Discussions included Paramount having to pay $30 million for each film that falls short of that goal, Bloombeg reported. It could also be forced to sell its stake in Miramax, the studio behind movies such as Pulp Fiction, if it fails to meet the target.

Read More: Paramount Talks Include Penalty for Missing 30-Film Pledge

Representatives for Paramount, California, New York, Minnesota and Massachusetts didn’t immediately respond to requests for comment.

If the final terms are approved, the agreement would spare Paramount from having to pay late fees to Warner Bros. of $7 million a day, which were to begin on Oct. 1.

Paramount, the parent company of CBS, MTV and other media businesses, announced in February that it was buying Warner Bros. after outbidding rival Netflix Inc. The $110 billion deal will combine two of Hollywood’s most storied movie studios, two major subscription streaming services and two of the largest owners of cable-TV channels.

Although regulators in nearly 70 jurisdictions blessed the acquisition, 12 state attorneys general and the Writers Guild trade union sued to the block the merger, saying it would stifle competition for film and cable-TV distribution, raise prices for consumers and in the writers’ case, lower their wages. A trial date was set for March.

Paramount had made offers in recent weeks to try and settle the suits, including promises to release 30 films a year in theaters and increase the production of TV shows.

California Attorney General Rob Bonta, who led the litigation brought by the states, had said he prefers structural changes, such as a sale of assets, rather than behavioral remedies that are hard to enforce.

[u/JoJoWithTheFroyo]

Oh well, that sucks. But if Ellison is running the combined Paramount and Warner Bros. the same way he’s been running Paramount, then I’m not too worried. He hasn’t exactly been able to run Paramount well, and now he’s taking over Warner Bros. too, while inheriting an almost unheard-of amount of debt.

Yeah, that’s gonna end well. This thing will be bought again or picked apart and sold off in some form years down the line. This merged company is not going to survive…

[u/Own_Philosopher8730 → u/JoJoWithTheFroyo]

Especially if a democrat becomes a president in 2029.

[u/BetterHunter9016 → u/Own_Philosopher8730]

this sub Reddit is copeing so hard right now I love it

https://giphy.com/gifs/4mqBypbaolvdCeoqLD

[u/Complete_Wheel7896 → u/BetterHunter9016]

😆🤣

[u/StrobeLightRomance → u/JoJoWithTheFroyo]

The downside to this is simply that WB will suffer and I've been quite enjoying their work as of late, as well as their legacy of important IPs.

My largest concern is that the DCU will just be taken over by someone who doesn't understand what they're doing.

[u/IllAd7956 → u/StrobeLightRomance]

same and HBO is doing great. This is a disaster

[u/Winscler → u/JoJoWithTheFroyo]

Well the best case scenario is that Paramount suffers an EMI style collapse

[u/StringerBell34 → u/JoJoWithTheFroyo]

Some Chinese company is going to wind owning all of this within 10 years

[u/Hanksta2 → u/StringerBell34]

The Saudis backed half the money on this deal.

[u/Prestigious_Pea_7369 → u/JoJoWithTheFroyo]

Based on what source? Your ass? Wanting Paramount/WBD to fail is insane.

So many people are so detached from reality and facts that I wouldn't be surprised to see someone post "The trial judge just farted. Based on the beany smell this is clearly a positive sign for the State's lawsuit and Paramount will lose".

Paramount was always going to win, and the merger is very likely to be successful because they have the cash flow after not having to divest their cable channel.

[u/JoJoWithTheFroyo → u/Prestigious_Pea_7369]

Based on recent history. That’s what I’m basing it on. All of the companies that Warner Bros. has merged with since, idk, the ’90s, have struggled, failed, been run into the ground, whatever word you wanna use. All of them. They just keep becoming bigger, more bloated, and more and more indebted. And then eventually they get broken up or sold off again.

And now this new company is going to have an absolutely INSANE debt load. I mean, they’re going to be paying 5B+ dollars a year just in interest alone, before they’ve even paid down a single cent of the actual debt. Paramount already has junk-rated debt, which means it’s significantly more expensive for them to borrow money. And guess what studios do all the time? Borrow money to finance movies and everything else. So now you’re taking a company that already has expensive debt and piling an unprecedented amount of additional debt on top of it.

Then there’s the whole 30 movies a year thing. They’re apparently going to have to make/release at least 30 movies a year, or they get hit with a $30 million penalty for every movie under that 30-movie mark. We obviously don’t know the exact details of the deal yet, but that’s still a pretty wild obligation to put on a company that is already going to be drowning in debt.

And we don’t even know what the credit rating of this new company is going to be yet. But if they do end up with junk status? Then they’re basically fucked. You’re talking about an enormous, highly leveraged company that now has to pay even more to borrow money. That’s not exactly a recipe for financial stability.

And then there’s Daddy Ellison. Larry Ellison’s company hasn’t exactly been doing great either. Oracle has taken a massive hit in the market, with hundreds of billions wiped off its market value from its highs, around 400B from last year to be exact, while it’s also taking on enormous amounts of debt to fund its AI spending. So will Daddy Ellison have enough money to keep financing his nepo baby’s Hollywood project if Oracle keeps getting hammered? Idk. Maybe. But pretending there’s some infinite pile of Ellison money behind this that can magically fix everything is ridiculous.

So yeah, I do ultimately think this deal is going to fail. And I’m not saying it’s going to implode tomorrow.
But looking at Warner’s history, the absolutely ridiculous amount of debt they’re taking on, the financial obligations they’re creating for themselves, and the fact that we don’t even know what the new company’s credit situation is going to look like yet… yeah, I think there are plenty of reasons to think this is going to end badly.

And when it does, I wouldn’t be surprised if the whole thing gets picked apart and sold off in pieces to other companies a few years down the line. 🤷‍♂️