Twelve state attorneys general have settled their lawsuit over the Paramount Skydance and Warner Bros. Discovery merger, resolving a case the states filed in July that alleged the deal would harm competition. The agreement still needs a court's approval, and its obligations would run for five years. Washington Attorney General Nick Brown was joined by the attorneys general of California, Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York and Oregon.
The settlement's most concrete terms target how many films Paramount puts in theaters. In the first two years, the company must release 30 films annually, 20 of them wide. For the following three years the requirement rises to 32 films a year, with 21 wide releases. A wide release means a national opening on at least 2,000 screens at the same time, and more than 100 of the films covered by the deal must meet that bar. At least four independent films must come out each year.
Paramount also has to spend more on production at home. The settlement commits at least an additional $1.5 billion to domestic film production, measured against the company's 2025 U.S. spending levels. About 5% of Paramount's production currently happens in the United States. If a federal credit of 20% or more for film production is enacted, the domestic share would have to reach 20% over the opening two years and 30% or higher after that, and a broader state credit in California or New York would lift the floor to 40% or more.
Two funds are part of the package. A workforce fund of $47.5 million over five years is meant for workers displaced by the merger. A separate independent film fund puts in $5 million a year, $25 million in total. The company must keep existing collective bargaining agreements in force and negotiate in good faith with unions going forward.
If Paramount falls short on its release commitments, the consequences are spelled out. Missing a film triggers a $30 million payment to union trust funds, including the WGA, IATSE, DGA and IBT, as well as the Motion Pictures & Television Fund and the National Association of Attorneys General. Falling short in any year would also require Paramount to divest itself of Miramax Studios.
On the distribution side, the settlement separates negotiations for Paramount's cable channels from those for Warner Bros. Discovery's channels, and effectively caps affiliate agreements for those packages. A free streaming service like Pluto TV must keep operating at its current service and quality level. An independent monitor will oversee compliance.
The states' July suit claimed the merger would bring higher prices, fewer theatrical releases and less variety in content. Brown framed the outcome as a win for consumers and workers: "While federal regulators ignored the clear impacts to consumers and labor posed by this mega-merger, states came together and secured significant concessions from this media behemoth". He added that "No company has free license to burden the public with anticompetitive practices and we will continue to hold them accountable."
Brown's office has announced several other settlements in recent weeks, among them a $17.1 billion Meta child-safety settlement and a $225 million Amway settlement with the FTC.
