The Paramount and Warner Bros. Discovery merger has cleared its final hurdle as a judge has approved the settlement agreement over the states’ antitrust lawsuit, paving the way for the merger to close its deal and become official as early as next week. The merger will combine two juggernaut, historic, legacy Hollywood film studios under one roof as part of a $111 billion transaction, the largest media deal in history.
Judge Araceli Martínez-Olguín wrote in a court order on Wednesday that “the proposed consent decree represents a reasonable factual and legal resolution of the dispute” and “reflects a procedurally sound resolution.” She also said the parties “reached their agreement following highly contested, however brief, litigation, and they reached their agreement following what they report to have been several rounds of in-depth negotiations.”
The deal is now expected to close on October 6, per Paramount’s regulatory filings.
Getting over this final hurdle comes after months of delays, including the major antitrust lawsuit from a coalition of 12 states, and even a Hail Mary last ditch amicus brief from a grassroots coalition that sought to block the merger entirely. It even follows a lengthy period in which Netflix, not Paramount, had won the rights to acquire Warner Bros. Discovery’s film studio before Paramount muscled in with a bigger deal that WBD leadership could not ignore.
Soon to be all under the purview of one company: Paramount Pictures and Warner Bros. Pictures, streaming services HBO Max and Paramount+, news networks CBS News and CNN, cable channels including HGTV, Food Network, TNT, TBS, and Discovery combined with MTV, VH1, Comedy Central, and Paramount Network, broadcast network CBS along with premium cable juggernaut HBO, sports rights for the NFL, UFC, NCAA Basketball, MLB, and more, two studio lots in Hollywood and Burbank, and franchise IP like Harry Potter, “Lord of the Rings,” and DC Comics married with “Top Gun,” “Mission: Impossible,” “Sonic the Hedgehog,” “Transformers,” and so much more.
Paramount will come into the combined company with $80 billion in debt, which it will aggressively be working to bring down through cost-saving measures, all while Ellison has promised to remain in California, avoid layoffs, and continue to release 30 movies annually between the two film studios.
Following a lawsuit brought by 12 state attorneys generals and led by California AG Rob Bonta, Paramount on September 21 settled the lawsuit by agreeing to consent decrees over a period of five years. The terms of the settlement require Paramount to pay penalties if it fails to release 30 to 32 movies per year as it has promised, to divest from its ownership of film studio Miramax, and to commit to invest $300 million annually to production in the United States.
Paramount has maintained that it needs this level of size in order to compete with the likes of tech giants like Amazon, Apple, and Netflix that have all taken over the entertainment sphere, as well as YouTube, which continues to be the dominant source in which people spend most of their viewing hours. It will aim to do that with its connections with talent like Tom Cruise, James Cameron, Damien Chazelle, and many more.
More to come…
