Paramount Skydance has reached a settlement with twelve US states that had filed suit to block its $81 billion takeover of Warner Bros. Discovery, effectively removing the last major legal obstacle to one of the largest media mergers in years. California Attorney General Rob Bonta, who led the coalition of states, announced the agreement on Monday alongside confirmation that the Writers Guild of America had also settled its separate antitrust challenge. The deal still requires final judicial approval.

The merger will bring together two of Hollywood's oldest studios — along with major television networks including CBS and CNN, and streaming platforms HBO Max and Paramount+ — under the leadership of David Ellison, whose father is billionaire Oracle founder Larry Ellison. Financing for the transaction reportedly includes around $24 billion in equity from the sovereign wealth funds of Saudi Arabia, Qatar and Abu Dhabi. The Trump administration's Justice Department approved the deal in June without requiring structural changes, and the states' lawsuit had been described by Paramount as its "final obstacle."

Under the terms of the settlement, Paramount committed to spending at least $300 million more annually on US film production than it did in 2025, and pledged to produce 30 films per year in each of the first two years of the combined company, rising to 32 per year in years three through five — with at least 20 percent required to be major blockbusters. The agreement also establishes a News Editorial Independence Board to set editorial principles for the merged company's news operations, including CNN, overseen by an internal monitor, an independent trustee and a committee of five states. Additionally, Paramount agreed to fund worker displacement support and to prohibit writer layoffs at CBS News for five years, as well as paying $17.5 million into the WGA's health fund.

The WGA, while confirming its settlement, made clear it remains opposed to the deal. "We continue to believe the merger will cause damage to writers and the industry at large," the guild said, citing the financial reality of pursuing a complex antitrust trial alone. Bonta was equally candid, saying he personally opposed the merger but that his role was to secure the best available outcome for Californians rather than to block a transaction that had already cleared all other regulatory hurdles worldwide.

Critics warn that the settlement marks another step in the consolidation of an industry already dominated by a handful of powerful players. The combined entity would control roughly 27 percent of wide-release theatrical film distribution and a similar share of the basic cable market, according to the original state complaint. For workers in entertainment hubs from Los Angeles to Atlanta, advocates cautioned that promised safeguards may not prevent significant job losses — even as Paramount CEO Ellison declared the settlement represented "complete clearance" for the deal to proceed.