Paramount Skydance Clears Legal Hurdle, Eyes WBD Merger Close in Two Weeks
Paramount Skydance settled with 12 state attorneys general, clearing the path for its $110 billion Warner Bros. Discovery acquisition. CEO David Ellison expects the deal to close in about two weeks.
Updated
The brief
- Paramount Skydance settled a lawsuit from attorneys general of 12 states, removing a key obstacle to its $110 billion acquisition of Warner Bros. Discovery.
- CEO David Ellison told staffers the merger is expected to close in about two weeks; missing the Sept. 30 deadline would have triggered a 25-cent-per-share ticking fee, roughly $650 million per quarter.
- The combined company will merge Paramount+ (nearly 82 million subscribers) with HBO Max (over 140 million subscribers) into a single service to compete with Netflix and Disney+.
CNN and CBS News moved one step closer to sharing a corporate parent after Paramount Skydance agreed to settle a lawsuit brought by attorneys general from 12 states, including California and New York, that had delayed its acquisition of Warner Bros. Discovery.
According to multiple reports, the settlement was announced on Monday. Its reported terms may include no sale of Paramount's cable networks and an independent board to ensure there is no editorial interference at CNN or CBS News.
Following the settlement news, Paramount Skydance CEO David Ellison reportedly told staffers he expects the merger to close in about two weeks.
Fewer opportunities
California Attorney General Rob Bonta, who led the opposition to the $110 billion merger, said in July that the combined company's ownership of CNN and CBS News would create "fewer opportunities for Americans to hear the full breadth of information and opinions on a subject, and then come to their own conclusions."
The lawsuit itself focused on the merger of two movie studios. The states argued the deal could lead to job losses in California, higher prices, and less film and TV content — potentially harming movie theaters, basic cable distributors, and consumers.
Ross Benes, senior analyst at Emarketer, said the settlement shows "California did not have as much leverage as it portrayed."
"The threat of political backlash over job losses outweighed the need to push back against corporate consolidation or protect consumer interests," Benes said. He added that Paramount Skydance's steamrolling of legal obstacles shows regulations governing mass media ownership have essentially ceased to exist in the U.S.
Streaming impact
The merger will reshape streaming once it finalizes. Paramount Skydance will house both Paramount+, with nearly 82 million subscribers, and WBD's HBO Max, with over 140 million subscribers globally. Executives have said the two services will merge into one, giving the combined platform the scale to compete with Netflix and Disney+. Incoming leadership has assured that HBO will retain creative independence as a sub-brand within the new structure.
"This settlement materially changes the trajectory of the streaming wars heading into 2027," said Mike Proulx, Forrester's vp research director. "A combined Paramount and HBO Max has the kind of heft to take on the likes of Netflix, pairing two major studios with what will become one of the industry's largest content libraries under a single roof."
Quick resolution
The urgency to settle stemmed from two deadlines. The two sides were headed toward an antitrust trial set for March 2027, which also included a complaint filed by the Writers Guild of America opposing the merger. And if the deal was not completed by Sept. 30, Paramount Skydance would have owed shareholders a 25-cent-per-share "ticking fee" — reportedly $650 million per quarter.
Meanwhile, CNN CEO Mark Thompson has tried to reassure staffers during the uncertain period. At one of the network's most recent global town halls, he urged them to execute their strategy "with confidence and gusto" and not get too consumed by the unknown.
Source: Adweek
Based on Adweek; variety.com
Filed under paramount-skydance, warner-bros-discovery, streaming, mergers-and-acquisitions, media-industry
Tom Whitfield
Show full bio
Staff writer covering consumer brands and retail at Marketing Herald.