Paramount Skydance has reached a settlement with California and other states that sued to block its $110 billion acquisition of Warner Bros. Discovery, Bloomberg reported Monday, citing a person familiar with the matter. The agreement, expected to be announced later in the day, would remove a major obstacle to one of the largest media mergers in history.
Settlement talks came together over the weekend after four states that had opposed the terms outlined with California conceded, Bloomberg reported. Deadline reported Sunday that Minnesota Attorney General Keith Ellison was among four attorneys general resisting the framework, along with counterparts in New York and Connecticut and, reportedly, Washington. Keith Ellison’s office did not respond to the outlet’s request for comment.
The states sued July 13 in the U.S. District Court for the Northern District of California, alleging the merger would violate the Clayton Act by substantially lessening competition in theatrical film distribution and the licensing of basic cable channels. The coalition includes Arizona, California, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington. Paramount said at the time that the suit was wrong on the facts and the law.
Bloomberg also reported that the states secured independent editorial boards for CBS and CNN as part of the settlement. The Wall Street Journal reported Sunday that concessions under discussion included a $1.5 billion investment in California production, a commitment not to sell either studio lot and potential penalties if Paramount fails to honor a pledge to produce 30 movies a year after the merger, according to Reuters. Shares of Warner Bros. Discovery rose nearly 10% and Paramount shares rose about 7% after the Bloomberg report, Reuters said.
Paramount was set to owe Warner Bros. Discovery shareholders an additional $7 million a day beginning Oct. 1, 2026, if the deal had not closed, Variety reported. Paramount Chief Executive Officer David Ellison had also threatened to move company operations out of California, Variety reported in a separate story. Even with a settlement, the merger will not close immediately, a source told Variety. Paramount and Warner Bros. Discovery will need at least a week or so after any deal with the states because of the transaction’s financing.
California Attorney General Rob Bonta, who has led the coalition, has said behavioral remedies are weak and difficult to enforce. “There needs to be separate ownership,” Bonta told Variety in August. Opponents criticized the framework as talks progressed. “An agreement based only on unenforceable concessions is a win only for David Ellison,” the Block the Merger Coalition, an alliance of Hollywood unions and advocacy groups, said.
Paramount also asked a judge in California in August to require Minnesota and the other states to post a $1.88 billion bond to cover losses during any delay.
Paramount and Warner Bros. Discovery did not immediately respond to requests for comment.
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