A US federal judge on Wednesday approved a settlement between Paramount and a group of 12 US states, removing the last major legal obstacle to the company's roughly $110bn takeover of Warner Bros. Discovery. Judge Araceli Martinez-Olguin signed a consent decree that binds Paramount to a set of concessions for five years, with the court empowered to enforce them. According to Dutch broadcaster NOS, the deal is expected to be completed early next week.
The states, led by California, had sued to block the merger, arguing it would stifle competition. They estimated that nearly one-third of theatrical releases and basic cable programming would fall under the combined company. Concerns also covered possible higher prices and the effect on workers; opponents in the film industry warned of job cuts and fewer films produced each year. The states dropped their lawsuit in favour of a settlement reached on September 21. The judge called the agreement a "fair, reasonable, and good faith approach to address the competitive harms".
Under the decree, Paramount must release 30 films a year in US cinemas for the first two years and 32 a year for the following three. NOS reports the company has also pledged an extra $300m a year for US film production over five years. Negotiations with cable providers for Warner-owned channels must be kept separate from those for Paramount-owned channels. The agreement also creates a five-member panel to safeguard the editorial independence of CNN, owned by Warner Bros. Discovery, and CBS News, part of Paramount. NOS reports it must be established within six months of the takeover.
Critics remain unconvinced. Paramount is led by David Ellison, son of Oracle founder Larry Ellison, whose family has ties to President Donald Trump. Al Jazeera notes that Ellison is in charge of appointments to the news oversight board. Senator Elizabeth Warren called the outcome "disastrous", describing the company as Trump-aligned and foreign-owned. Reports say financing includes about $24bn in equity from sovereign wealth funds of Saudi Arabia, Qatar and Abu Dhabi. Paramount had reportedly threatened to leave California unless Attorney General Rob Bonta ended the suit, while Governor Gavin Newsom urged a settlement. The Trump administration approved the deal in June without changes.
After the ruling, Paramount named Mattel chief executive Ynon Kreiz co-CEO of the combined company. Kreiz, who oversaw Mattel's move into film with "Barbie" and previously headed Dutch television company Endemol, will handle daily operations and integration. Ellison remains chairman and CEO, focusing on strategy, creative direction and technology. Ellison called the merger "a transformational moment for our industry".
The deal follows Paramount's win over Netflix in a bidding war in February. It brings together Warner Bros. Pictures, CNN and HBO Max with Paramount's holdings, and its effects on competition and newsroom independence are likely to remain under scrutiny.