SEATTLE — A coalition of 12 state attorneys general, including Washington Attorney General Nick Brown, announced a landmark settlement on Monday, September 21, resolving a multistate antitrust lawsuit against Paramount Skydance Corporation and Warner Bros. Discovery. The agreement establishes a sweeping consent decree that imposes strict conditions on the companies’ proposed $110 billion mega-merger, to protect competition, industry workers, and consumers.
The settlement arrives just two months after the states sued to block the corporate consolidation. Filed on July 13, the lawsuit alleged that merging two of Hollywood’s historic film studios and major cable television operators would unlawfully extinguish competition, leading to lowered creative output and raised prices. The states contended that unchecked consolidation would devastate the entertainment industry ecosystem, harming thousands of workers and burdening Washington consumers with higher subscription rates and theater costs.
Brown celebrated the agreement Monday as a crucial victory for the public interest.
“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,” AG Brown said. “No company has free license to burden the public with anticompetitive practices and we will continue to hold them accountable.”
The merger, initially announced in February 2026, aimed to unite the century-old rivals, placing iconic cinematic franchises, extensive streaming platforms like HBO Max and Paramount+, and major news networks CBS and CNN under a single corporate umbrella. As the summer approached, it became clear that federal agencies—traditionally the primary arbiters of corporate mega-mergers—were not moving to block the transaction. Stepping into the legal void, the coalition of states secured a temporary restraining order in late July that halted the merger just before it was slated to close.
With Monday’s settlement, the states have traded their demand for a full injunction for an enforceable consent decree packed with highly specific operational mandates spanning a five-year commitment period. The binding conditions dictate how the future combined entity will release movies, negotiate cable fees, treat union employees, and manage its news divisions.
Settlement Agreement Terms and Conditions
An Annual Film Release Commitment: For a term of five years, Paramount is obligated to release:
- 30 films a year — including 20 wide releases — in the first two years.
- 32 films a year — with 21 wide releases — in years three, four, and five.
- Paramount commits to release at least four independent films in each year of the commitment period.
There are significant and robust protections in the settlement to ensure that the films released are high quality and widely available to the public in theaters. For example, Paramount is obligated to release tentpole / blockbuster films annually and to make the commensurate financial investments for budget and marketing to accompany those films. Over 100 of the films released must be wide release films, meaning they will be nationally and concurrently exhibited on at least 2000 screens.
If Paramount fails to meet this film output requirement in any year, the company will be required to divest Miramax Studios and must pay $30 million per missed film toward the healthcare and retirement trust funds associated with the Writers Guild of America (WGA), International Alliance of Theatrical Stage Employees (IATSE), Directors Guild of America (DGA), International Brotherhood of Teamsters (IBT) and other unions, toward the Motion Pictures & Television Fund, and to the National Association of Attorneys General for antitrust enforcement.
Domestic Production: Paramount has agreed to bolster the merged company’s U.S. film production and spend an at least additional $1.5 billion over five years over its 2025 U.S. spending levels.
Right now, around 5% of all of Paramount’s production is in the U.S. If a federal film tax credit of at least 20% is passed, production in the U.S. would need to increase to be 20% of all film production for years one and two and at least 30% of all film production for the remaining years. If, in addition to a federal tax credit, a more expansive state film tax credit is also passed in either California or New York, then production investment would need to increase to at least 40% of all film production being in the U.S instead of overseas.
No condition in the agreement requires the additional $300 million annually to be spent specifically in any of the complainant states. While the decree contemplates the potential passage of federal and state film tax credits that could trigger higher U.S. production quotas, the financial investment itself is not geographically restricted to Washington, California, New York, or any other specific state that led the litigation.
Independent Film Fund: The merged company will form and operate a fund for purchasing independent films and will make an annual contribution of $5 million per year, for a total of $25 million.
Protections for Workers: The merged company will commit $47.5 million in a Workforce Fund over five years for training and career development for workers who are displaced by the merger. The merged company must also honor previously established collective bargaining agreements and bargain in good faith with unions in years to come.
Cable Agreements: For five years, the merged company must conduct negotiations for Paramount basic cable channels independently from negotiations for Warner Bros. Discovery basic cable channels, preserving the existing competitive dynamic between the companies. The merged company also agrees to effectively cap the affiliate agreements for those packages. Preserving competition and limiting the merged company’s ability to raise prices in affiliate agreements helps to keep prices down for consumers. The merged company also must continue to offer a free streaming service, like Pluto TV, and maintain its current service and quality.
Ongoing Monitoring: The company also agreed to appointment of an independent monitor to oversee its compliance with this agreement.
The $110 billion merger has cleared its most formidable legal obstacle. The five-year commitment period clock will begin the moment the merger officially closes, ushering in a heavily monitored new era for one which will be one of the largest media companies in global history.
Author: Mario Lotmore
