Paramount is finally set complete its takeover of Warner Bros Discovery after negotiating a settlement with Attorneys General from 12 US states, including California, and the Writers Guild of America 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 will now allow the transaction to be completed.
These include releasing 30 films per year, all of which will remain in cinemas for at least 45 days – in line with a vow Ellison has been making for months – and cannot be shown on a Paramount owned streaming service within the US before 90 days after its cinema release.
The existing Paramount Pictures and Warner Bros. film lots will both be maintained and operated for at least five years, and there will be monitoring of CNN’s post-merger output by a news editorial independence board.
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.
There are additional terms relating to the charges paid by cinemas in the US and the provision of channels to cable operators. All the commitments will run for 5 years from the closing of the merger.
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.
However, each of the concessions they’ve now accepted are weaker behavioural remedies which are often difficult to subsequently enforce.
In a statement Ellison said: “Our goal has always been to build a stronger Hollywood — one with more stories told, greater choice for consumers and stronger competition.
“That vision was validated by unanimous approval from competition authorities in nearly 70 jurisdictions worldwide, who agreed this deal is pro-competitive, pro-consumer and pro-worker.
“Having now addressed the State AGs’ and WGA’s concerns, we have complete clearance for this merger and look forward to putting these commitments into action.
“Bringing Paramount and Warner Bros. Discovery together will build that stronger Hollywood, creating expanded opportunity for our people and even more great entertainment for audiences around the world.”
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.