By Jody Godoy
Sept 21 (Reuters) – Paramount Skydance has settled with California and 11 other states that sued to block its $110 billion acquisition of Warner Bros Discovery, a source acquainted with the matter said on Monday, clearing one of the last massive hurdles to closing a deal that would reshape Hollywood.
The settlement contains the creation of unbiased editorial boards for CNN and CBS, and a $30 million penalty per movie for any shortfall against Paramount’s pledge to release 30 films yearly, the source said.
Paramount, Warner Bros Discovery and California Attorney General Rob Bonta’s workplace did not immediately reply to Reuters requests for remark on the settlement.
The settlement caps months of regulatory and legal wrangling over a deal that would dramatically focus energy across Hollywood’s movie, TV, streaming and information companies.
By securing concessions aimed at preserving newsroom independence and sustaining film manufacturing, Paramount seems to have addressed some of the considerations, bringing the two corporations nearer to finishing a merger that will create one of the world’s largest media and leisure teams.
Shares of Paramount were up more than 5% on Monday, while Warner Bros Discovery surged more than 10%. Reuters first reported on Friday that Paramount and the states could settle as soon as the weekend.
WRITERS GUILD CHALLENGE REMAINS
While Trump administration regulators cleared the deal, a coalition of 12 state attorneys common, led by California’s Rob Bonta, sued in July to block the merger, arguing it would cut back competitors and create a media behemoth with the energy to raise costs in films and tv.
Antitrust regulators in other jurisdictions globally, including the European Union and Britain, have already cleared the acquisition.
A settlement with the states will help Paramount keep away from a $7 million-a-day “ticking fee” it owes Warner Bros shareholders for each day the deal does not close previous September 30.
But it does not absolutely take away Paramount’s obstacles to purchase Warner Bros Discovery. The Writers Guild of America has also sued to stop the deal, arguing it would lower pay and worsen working situations for movie and tv writers.
The union warned in July that a mixed Paramount-Warner Bros entity would have “both the incentive and the ability to lower costs by suppressing writers’ wages and reducing output.”
The Writers Guild of America did not immediately reply to a request for remark.
Still, a cleared Paramount-Warner deal suggests regulators may be more open to media consolidation as corporations scale up to compete with Netflix and Walt Disney. It also raises contemporary questions about focus in information, sports activities and leisure.