Blog Post | 115 KY. L. J. ONLINE | November 13, 2026
Did the States Settle for Too Little? Assessing the States' Settlement With Paramount in the Warner Bros. Merger.
By: Carter Gunn, Staff Editor, Vol. 115
Earlier this year, Paramount Skydance Corp. (“Paramount”) and Warner Bros. Discovery, Inc. (“Warner Bros.”) announced they would be merging with Paramount acquiring Warner Bros. for a total transaction cost of approximately $110 billion.[1] The merger combines “two of the ‘big five’ film studios (Paramount Pictures and Warner Bros. Pictures), more than fifty basic cable channels . . . [including HBO and Showtime], the most watched broadcast network (CBS), three subscription streaming services (Paramount+, HBO Max, and Discovery+), and three of the most prolific television production studios (Paramount Televisions Studios, CBS Studios, and Warner Bros. Television Studios).”[2] After being approved by the Department of Justice’s antitrust division,[3] twelve states, led by California, instituted an antitrust action against Paramount alleging its acquisition of Warner Bros. would harm competition in three relevant markets: “(1) distribution of wide-release theatrical films; (2) distribution of anticipated top-grossing theatrical films; and (3) licensing of basic cable channels to distributors.”[4]
Despite being granted a temporary restraining order in July, state enforcers in late September agreed to settle their antitrust action against Paramount.[5] Shortly after, on September 30, 2026, the court approved the party’s proposed settlement determining it was a “fair, reasonable, and good faith approach to address the competitive harms alleged . . . and does not violate the law or public policy.”[6] The agreement reached by the parties therefore raises the question of whether the concessions made by Paramount in the agreement actually resolve the alleged antitrust harms and is a fair and equitable agreement, or whether the states settled for too little failing to resolve the harms they sought to prevent.
Two of the states’ concerns with the merger are the alleged competition harms specifically to “distribution of wide-release theatrical films” and “distribution of anticipated top-grossing theatrical films.”[7] To resolve these alleged antitrust issues Paramount agreed to an annual film release commitment where they must release at least thirty films per year for the next two years, and thirty-two films per year for the following three years.[8] In the first two years, at least twenty of the thirty films must be wide release films, and for the following three years, at least twenty one of the thirty two films must be wide release films.[9] The parties also agreed that if Paramount does not meet its requirement, it will be forced to divest its entire ownership interest in Miramax Studios.[10] Additionally, for each film it falls below its requirement, Paramount must contribute thirty million dollars that is split between unions that work on production of films, the Motion Pictures and Television Fund, and the National Association of Attorneys General Fund.[11] Moreover Paramount also agreed to spend at least $300 million more annually, which would total at least $1.5 billion, on production in the United States than it spent on production in 2025.[12] When considering Paramount’s annual film release commitment and the harsh consequences for failure to adhere to its commitment, the terms of the settlement seem to appropriately address the alleged harms to competition. The states are concerned that the merger would harm competition relating to distribution of theatrical films, but this commitment would maintain levels of competition in the market thus alleviating the states alleged harms.
Additionally, state enforcers also allege that the merger will harm competition regarding the “licensing of basic cable channels to distributors.”[13] To address these concerns, Paramount agreed that it will separately negotiate agreement terms for Paramount cable channels and Warner Bros. cable channels, it will not alter the existing schedules for renegotiation of agreements covering cable channels, and it will not make any affiliation agreement for Warner Bros. basic cable channels contingent on agreement terms for the affiliation agreement for Paramount cable channels.[14] Paramount also agreed that if those provisions are materially breached, they will be forced to divest its entire ownership interest in Black Entertainment Television (BET), VH1, Comedy Central, Smithsonian, Destination America, and Science.[15] Moreover, the agreement establishes a News Editorial Independence Board based on CBS and CNN’s principles of “accuracy, independence, fairness, and journalistic integrity.”[16] By agreeing to separately negotiate Paramount and Warner Bros. cable channels and by establishing an independence board, the parties have mitigated the states alleged antitrust harms with respect to licensing of basic cable channels. Therefore, while there are antitrust concerns regarding the licensing of basic cable channels, the terms of the settlement support that this is an equitable settlement and a reasonable attempt to resolve the alleged antitrust harms.
While no settlement is perfect and completely resolves both party’s concerns, the agreement reached by the parties here appears to be a genuine attempt to resolve the antitrust concerns raised by the states.[17] Paramount has made several concessions that would alleviate the competition-based harms alleged in the relevant product markets. Therefore, based on the terms of the consent decree reached here the states did not settle for too little and the agreement is a fair and equitable resolution to the antitrust harms alleged to result from the merger.
[1] California v. Paramount Skydance Corp., No. 4:26-cv-07116-AMO, 2026 U.S. Dist. LEXIS 160668, at *8 (N.D. Cal. July 20, 2026); Al Barbarino, Paramount, Warner Seal Merger Agreement at $110B Value, Law360, (Feb. 27, 2026, at 8:35 EST), https://www.law360.com/articles/2447159/paramount-warner-seal-merger-agreement-at-110b-value.
[2] California v. Paramount Skydance Corp., at *8.
[3] Jeremy Barr, US Justice Department Approves $111bn Merger of Paramount and Warner Bros Discovery, The Guardian (June 12, 2026, at 8:54 EDT), https://www.theguardian.com/us-news/2026/jun/12/paramount-warner-bros-merger.
[4] Complaint at 11, California v. Paramount Skydance Corp., No. 4:26-cv-07116-AMO, 2026 U.S. Dist. LEXIS 160668 (N.D. Cal. July 20, 2026) [hereinafter Complaint].
[5] See Matthew Pearlman, States Settle Challenge of Paramount’s Warner Bros. Deal, Law360, (Sep. 21, 2026, at 2:44 EDT), https://www.law360.com/articles/2527866/print?section=california; California v. Paramount Skydance Corp., at *18.
[6] Order Granting Joint Motion to Enter Consent Decree at 2, California v. Paramount Skydance Corp., No. 4:26-cv-07116-AMO, 2026 U.S. Dist. LEXIS 160668 (N.D. Cal. July 20, 2026) [hereinafter Order Granting Consent Decree]. See Rachel Riley, Paramount Gets OK On Deal with State AGs Over Merger, Law360, (Sep. 30, 2026, at 10:46 EDT), https://www.law360.com/articles/2532336/paramount-gets-ok-on-deal-with-state-ags-over-merger.
[7] Complaint at 11.
[8] Consent Decree at 5, California v. Paramount Skydance Corp., No. 4:26-cv-07116-AMO, 2026 U.S. Dist. LEXIS 160668 (N.D. Cal. July 20, 2026) [hereinafter Consent Decree].
[9] Id.
[10] Id. at 7.
[11] Id. at 7–8.
[12] Id. at 6.
[13] Complaint at 11.
[14] Consent Decree at 8.
[15] Id. at 3, 9.
[16] Id. at 11–12.
[17] See Order Granting Consent Decree at 2 (holding the settlement reached by the parties “is a fair, reasonable, and good faith approach to address the competitive harms alleged in the Complaint”).