Paramount is finally set complete its takeover of Warner Bros Discovery after negotiating a settlement with Attorneys General from California and 11 other US states who had sued to stop the deal going ahead.
After a weekend of talks the two sides have reached agreement on a number of points which have yet to be publicly confirmed but are reported to include:
The release of 30 films per year which will remain in cinemas for at least 45 days before being made available on streaming or pay-TV, a pledge Ellison has been making for months.
The Paramount Pictures and Warner Bros. film studios operating as independent businesses for a defined period of years – something else which had Ellison already publicly offered.
Paramount pledging to remain in California – the studio had been actively briefing that it would quit the state if the deal was blocked.
And there will reportedly be independent monitoring of CNN’s post-merger output.
The legendary cable news outlet is widely seen as having a left-leaning editorial slant and some opponents have complained that the deal might lead to changes in its output or even risk introducing a pro-Republican bias.
Ellison has repeatedly positioned the deal as essential to protecting Hollywood and providing competition to tech firms such as Netflix, Amazon and Apple.
Regulators and competition watchdogs in the US, UK, EU and more than 65 other territories had already cleared the deal but the states’ challenge prevented it from completing and risked triggering a $7 million daily ‘ticking fee’ payable to WBD shareholders which Paramount offered as it fought to oust Netflix as the preferred bidder.
All of the AGs challenging the deal are elected Democrats, prompting accusations that their objections were informed by politics given the Ellison family’s links to US President Donald Trump.
Their opposition to the deal was backed by a campaign led by various Hollywood actors and industry veterans plus unions and some cinema owners.
But, with the case not set to be heard until next March, some unions and politicians have in recent weeks urged the two sides to reach a settlement out of fear that continued uncertainty could cost jobs and, ultimately, push Paramount to quit California.
The states had previously argued the tie-up was anticompetitive and that their objections could only be overcome by deep structural remedies being imposed by the court or voluntarily agreed to by Paramount.
However, each of the concessions they’ve now apparently accepted are weaker behavioural remedies which are often difficult to subsequently enforce.
What the Paramount / Warner Bros. Discovery Merger Means
The deal brings together a host of major film and TV studios, labels franchises and outlets.
Among the WBD stable this includes, Warner Bros., HBO, HBO Max, DC Studios, CNN, TNT Sports, Eurosport, Lord of the Rings, Dune, The Big Bang Theory, Game of Thrones and TT Games.
They’ll now sit alongside Paramount Pictures, CBS, Paramount+, MTV, Comedy Central, Mission Impossible, Star Trek, Transformers, the G.I. Joe film series, the upcoming Call of Duty films and international TV channels including 5 here in the UK.
Executives have already stated that the separate Paramount+ and HBO Max streaming services will be merged to create a major new destination better able to compete with Netflix.