It now seems almost certain that Paramount will be able to acquire Warner Bros Discovery in a deal that will reshape Hollywood, as ITV News’ Robert Moore reports.
Several states and Hollywood groups challenging Paramount’s buyout of Warner Bros have settled their legal case, paving the way for the $81bn (£60.58bn) mega-merger to go ahead.
The deal will still bring together two of Hollywood’s oldest studios, key TV networks like CBS and CNN, and streaming platforms HBO Max and Paramount+, as well as decades-old libraries with titles ranging from Harry Potter to Top Gun.
But among the terms of Monday’s agreement announced by California Attorney General Rob Bonta, who led the states’ case, Paramount pledged to increase film production in the US, commit millions of dollars to a fund aimed at supporting workers who are displaced by the merger and establish monitoring of the editorial independence of the company’s news operations.
The settlement still needs final sign-off by a judge.
Bonta said Monday’s agreement was about “protecting people’s careers, the lives they’ve built here in California, the livelihoods their families rely on,” but he maintained it was not a vote in support of the merger.
“I don’t think these two companies should merge,” Bonta said at a press conference on Monday.
Many Hollywood groups opposed the mergrer.
“But that’s not something that we are focused on with our resolution here.”
Paramount chief executive David Ellison welcomed the settlement, which he said marked “complete clearance for this merger”.
He added that “bringing Paramount and Warner Bros. Discovery together will build that stronger Hollywood, creating expanded opportunity for our people and even more great entertainment for audiences around the world”.
The coalition of states, including entertainment heavyweights like California and New York, sued to block the merger in July, alleging a Paramount-Warner combination would “extinguish competition” and lead to fewer choices for consumers, particularly cinemagoers and cable customers across the US.
The Writers Guild of America also filed a lawsuit, and both challenges were headed towards a full antitrust trial set to begin in March. The WGA separately confirmed on Monday that it had settled its case, too.
“We continue to believe the merger will cause damage to writers and the industry at large,” the guild said in a statement.
“Now that the Attorneys General have settled with Paramount, however, as a nonprofit, the WGA must contend with the reality of forging ahead alone, with no backing from government enforcers, with a complex antitrust lawsuit that would cost millions of dollars to pursue through trial.”
The union added that Paramount had agreed to prohibit redundancies among writers at CBS News for five years and to pay $17.5m (£13.09m) to the WGA’s health fund, along with legal fees from the litigation.
Paramount previously agreed to delay its transaction well into next year so the challenges could make their way through court.
It then quickly called for a settlement, arguing that it had satisfied all regulatory clearances worldwide, saying that the states’ lawsuit, in particular, was its “final obstacle”.
Media analyst and Professor of Instruction at the Northwestern University School of Communication Rick Morris told ITV News all parties involved in the merger would walk away “feeling reasonably good”.
“I think the merger is a good deal for both sides. The states get something, they get about five years of guarantees on the things that they were interested in,” Morris said.
“It particularly protects California, which was very interested in preserving its employment.”
