Updated September 21, 2026 at 12:42 PM CDT
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Paramount's owners have made a series of concessions to a coalition of 12 Democratic state attorneys general to resolve a lawsuit that endangered the media company's $111 billion takeover bid of its larger Hollywood rival, Warner Bros. Discovery.
"The settlement is not a vote of support for this merger," said California Attorney General Rob Bonta, adding he didn't think the two companies should merge. But, he said, the settlement is a "strong solution that protects competition and consumers."
The agreement will bind Paramount to operate Warner Bros. Studios and Paramount Pictures separately — at least for now. Together, they will release at least 30 films a year for two years, and 32 movies a year for the next three, or risk a financial penalty. It will also spend $300 million more annually to make movies in the U.S.
"More production means more work here at home," Bonta said in announcing the settlement.
And the deal will also create a board intended to insulate the combined company's tv news giants, CBS and CNN, from corporate intervention in newsroom decisions, a demand from several of the attorneys general.
A trustee will monitor Paramount's compliance with the terms, Bonta said. If the company fails, he said the states intend to take it to court.
Close ties to Trump
The Ellison family, which controls and runs Paramount, has struck close ties with President Trump.
David Ellison bought Paramount just over a year ago. He took certain steps to win the approval of Federal Communications Commission Chair Brendan Carr for that deal. He went on to hire Bari Weiss as editor in chief of CBS News. The founder of the center-right views and news site The Free Press, Weiss has argued the mainstream press is too reflexively critical of the president. She has fired several CBS veterans – others have chosen to leave – and appointed her own picks.
Both the purchase of Paramount and the deal to buy Warner rely on the fortunes of Ellison's father, Oracle co-founder Larry Ellison, a Trump financial backer and adviser. Trump arranged for him to have a controlling stake of TikTok in the U.S. when it was spun off from its Chinese owner.
Given both the state of CBS News and the Ellison's ties to Trump, the attorneys general expressed concern about how that could affect the integrity of CNN's news coverage. That issue was even more central to the attorneys general of Connecticut and New York, William Tong and Letitia James, respectively. Trump has long accused CNN of being "fake news" and recently barred its journalists from the White House. On Monday, the network joined MS NOW and Politico in suing the administration for infringing on their First Amendment rights.
A Hollywood force laden with debt
Paramount's acquisition of Warner will bring together the two iconic movie houses, CBS and CNN, a plethora of cable channels, the Paramount Plus and HBOMax streaming platforms, and such major franchises as DC Comics, Harry Potter, Star Trek and Star Wars.
Ellison argues Paramount needs to bulk up to compete against digital titans Netflix, Amazon and Apple, as well as Disney.
The attorneys general stepped in and filed their antitrust lawsuit, citing fears that the consolidation of such similar competitors could lead to mass layoffs in the entertainment industry, fewer films being made, higher charges to movie theaters, and higher ticket prices for moviegoers.
David Ellison — who helped to finance Tom Cruise's Mission Impossible franchise and the Top Gun sequel — is by all accounts enamoured of the film-making industry. But keeping his promise to make 30 films a year will be financially difficult. Paramount borrowed more than $54 billion to construct a bid for Warner that that company couldn't refuse, even though it had agreed to a competing bid from Netflix. Warner has its own debt, meaning the combined company will owe up to $87 billion.
As a result, unions at various divisions of the two companies are predicting significant layoffs. Bonta tried on Monday to reassure entertainment workers that would not happen.
On September 18, the FCC approved an enormous infusion of foreign cash to finance the deal. The merged company will be 49.5% owned by foreign interests, including the sovereign wealth funds of Saudi Arabia, Qatar, and Abu Dhabi. And the agency ruled that it could go up to 100%. Paramount has promised their stakes would be made up of silent, non-voting shares.
The idea that a major U.S. broadcast company or TV news outlet could have such a degree of foreign ownership was unthinkable in an earlier age, according to industry executives, outside analysts and former federal officials. Australian-born Rupert Murdoch famously became a U.S. citizen so that he could take over U.S. television properties in the 1980s.
Eager to avert hefty fee
The antitrust trial was to start in March. And the judge had ordered mediation to occur in mid-October. But dragging out the legal battle would have been costly to Paramount. In wooing Warner shareholders, Paramount had pledged $7 million every day past October first that it failed to wrap up the deal.
Bonta faced pressure too. Paramount let it be known it was hunting for vast new properties in Nashville, Tennessee and Austin, Texas to house its headquarters and studios. Such prominent California Democrats as Gov. Gavin Newsom, former state attorney general and U.S. Secretary of Health and Human Services Xavier Becerra — who is running to succeed Newsom — and Los Angeles Mayor Karen Bass urged a compromise to keep Paramount in Hollywood.
Additionally, Paramount asked the court to require the states put up a bond to cover the money it would have to pay Warner shareholders because the trial would imperil, or at least significantly delay, the deal. Though the judge had not yet ruled, no state wanted to have to fork over money for that privilege — especially considering Paramount had voluntarily offered that fee to Warner as a sweetener to accept the deal.
This scuppers that concern for Paramount and the state.
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