A US federal judge has approved a settlement clearing the way for Paramount's takeover of Warner Bros. Discovery, creating a major Hollywood media empire spanning television, news, and cinema. The deal, which was approved by Judge Araceli Martinez-Olguin of California, includes concessions from Paramount to end an antitrust challenge brought by 12 US states. The commitments, which run for five years, will be enforced by the court.
Paramount, led by David Ellison, won a bidding war against Netflix in February for control of Warner Bros. Discovery's assets, including Warner Bros. Pictures, CNN, and the HBO Max streaming service. Ellison, whose ultra-wealthy family has ties to US President Donald Trump, will stay on as chairman and CEO, focusing on strategy, creative direction, and technology. Mattel Chief Executive Ynon Kreiz will join Paramount as co-CEO, handling day-to-day operations and the integration of the two businesses.
The merger, one of the largest-ever media mergers, was approved by the Trump administration in June without demanding changes to its business. However, 12 US states sued to block the transaction, citing concerns that the combined company would slash jobs in the Hollywood industry and reduce the number of films produced annually. The settlement includes safeguards, such as a board to protect CNN's editorial independence, and commitments from the merged studio to release a certain number of movies per year.
The decree commits the merged studio to release 30 movies in each of the first two years of the deal, and 32 in each of the following three years. Financing for the deal reportedly includes about $24 billion in equity from the sovereign wealth funds of Saudi Arabia, Qatar, and Abu Dhabi. David Ellison's father, billionaire Oracle founder Larry Ellison, provided major funding and a guarantee to lenders backing the deal.
Opponents in the movie industry expressed concerns that the combined company would have a significant impact on the industry, including job losses and reduced film production. News media groups also feared that CNN's independence could be compromised. The settlement was reached by the parties on September 21 and was awaiting the judge's approval. Kreiz will join Paramount on October 5 and take a seat on the board at closing.
The approval of the settlement paves the way for the creation of a next-generation global media company, with Ellison stating that bringing together Paramount and Warner Bros. Discovery is a "transformational moment for our industry." The deal is expected to have significant implications for the media landscape, with the combined company spanning television, news, and cinema.
The merged company will have a significant presence in the media industry, with a portfolio of assets including Warner Bros. Pictures, CNN, and the HBO Max streaming service. The deal is expected to close in the coming months, with Kreiz taking on his new role as co-CEO. The company's future plans and strategies will be closely watched by industry analysts and stakeholders.
Key points
- Paramount's takeover of Warner Bros. Discovery has been approved by a US federal judge, paving the way for the creation of a major Hollywood media empire.
- The deal includes concessions from Paramount to end an antitrust challenge brought by 12 US states, including commitments to protect CNN's editorial independence and release a certain number of movies per year.
- The merged company will have a significant presence in the media industry, with a portfolio of assets including Warner Bros. Pictures, CNN, and the HBO Max streaming service.
