Paramount Skydance settles antitrust lawsuits to clear Warner Bros Discovery merger

Paramount Skydance Corporation (PSKY) announced on Tuesday that it entered into a consent decree with twelve state attorneys general and a settlement agreement with the Writers Guild of America, resolving antitrust lawsuits seeking to block its planned merger with Warner Bros. Discovery, Inc.

According to a regulatory filing, the U.S. District Court for the Northern District of California issued an order entering the States Consent Decree on September 30, 2026, resolving a lawsuit filed under Section 7 of the Clayton Act and modifying a no-close order to permit the merger to proceed.

The States Consent Decree imposes a five-year commitment period following the closing of the merger. During this period, the combined entity must release at least thirty films in each of the first two years and at least thirty-two films in each of the subsequent three years. At least twenty of those films in the first two years, and twenty-one in each remaining year, must be wide releases on at least 2,000 screens. At least four films per year must be independent films, and at least 50% of the counted films must be produced or jointly produced by the combined entity.

The agreement requires each counted film to maintain a theatrical release window of at least forty-five days, restricts marketing on premium video-on-demand or streaming platforms prior to the thirtieth day, and blocks availability on subscription video-on-demand services for at least ninety days. Additionally, at least 20% of the films each year must have production and acquisition budgets of at least $50 million and be released on at least 3,000 domestic screens within their first four weekends.

If the combined entity fails to meet its annual film release commitments, it faces potential divestiture of Miramax Studios or a $30 million contribution for each missed film, split between industry health and retirement funds, the Motion Picture & Television Fund, and the National Association of Attorneys General Fund.

On basic cable, the combined company must separately negotiate affiliation terms for Paramount and Warner Bros. Discovery channels without linking portfolios or sharing confidential data. An uncured material breach of these provisions requires the divestiture of BET, VH1, Comedy Central, Smithsonian, Destination America, and Science.

The combined entity must also increase U.S. production spending by at least $300 million annually, totaling $1.5 billion across the commitment period, compared to 2025 combined levels. The company agreed not to sell or close the Paramount or Warner Bros. studio lots, to honor existing collective bargaining agreements, and to invest $9.5 million annually in workforce training and career development. It will also establish an Independent Film Fund with $5 million in annual contributions and form a five-member News Editorial Independence Board within 180 days after closing to oversee CBS News and CNN editorial principles and disputes.

Pluto TV must be maintained as a free, ad-supported streaming service at or above current quality levels. The company will also reimburse the plaintiff states up to $40 million for reasonable attorneys' fees and expert costs.

Under the separate settlement with the Writers Guild of America, West, Inc. and the Writers Guild of America East, Inc., the company will make a one-time general contribution of $17.5 million to the Writers' Guild-Industry Health Fund within seven days of closing. It will also pay up to $6.0 million in WGA attorneys' fees and costs within thirty days and maintain a baseline headcount of full-time WGA-represented staff employees at CBS News Broadcast during the commitment period.

Paramount Skydance said it does not expect the consent decree or the settlement agreement to have a material impact on its ability to achieve its previously announced synergy and leverage targets.