Paramount Skydance has settled a lawsuit with a dozen US states, paving the way for its $110bn merger with Warner Bros Discovery. The agreement requires Paramount to produce at least 30 films a year and ensure a certain percentage are produced in the US. This development clears one of the final hurdles for the merger that will reshape Hollywood.
The settlement was announced by California Attorney General Rob Bonta, who said the agreement was “not a vote of support for this merger”. Paramount’s chief executive, David Ellison, welcomed the resolution, stating that the company now has complete clearance for the merger. Ellison emphasized that the merger will serve consumers, workers, and the creative community.
The Writers Guild of America (WGA) had also filed a lawsuit against the merger, but was forced to settle due to limited resources. As part of the settlement, Paramount will pay $17.5m into the WGA health fund, cover legal fees, and prohibit writer layoffs at CBS News Broadcast for five years. The WGA still believes the deal will harm writers and the industry.
The settlement includes strict guardrails to prevent Paramount from fulfilling its annual quota with low-budget or automated content. To ensure compliance, Paramount has agreed to the appointment of an independent monitor. The deal also requires Paramount to ensure 20% of all film production takes place in the US for the first two years, rising to over 30% over the following three years.
If Paramount fails to meet its annual production quota, it will be forced to sell its 49% stake in Miramax. Bonta argued that the deal will lead to more movies, jobs, and economic activity, with economic activity potentially increasing by $300m to $1.5bn. The merged company will combine legacy studios, major streamers, and national networks under one umbrella.
Despite previous indications that the merged company would keep its headquarters in California, Bonta clarified that this commitment was not written into the legal agreement. The settlement was reached through a coalition of state attorneys general from Arizona, Colorado, and New Jersey, with California leading the legal push.
The merger is expected to be a “job creator” that will put people back to work across the industry. Paramount must release at least 30 films each year, with strict requirements for US production. The deal is seen as a significant development in the entertainment industry, with potential for increased economic activity and job creation.
Key points
- Paramount must produce at least 30 films a year and ensure a certain percentage are produced in the US.
- The WGA received $17.5m for its health fund and other benefits as part of the settlement.
- The merger is expected to increase economic activity by $300m to $1.5bn in film and TV production.
