Deal Terms Revealed: Paramount, 12 States Unveil Warner Bros. Settlement Plan

It’s official: Paramount Skydance has settled its blockbuster antitrust suit brought by a group of Democratic state attorneys general. California AG Rob Bonta announced the deal in a press conference Monday.

Now we know what that settlement includes:

–A “minimum numbers of annual film releases in both the WideRelease and Anticipated Top-Grossing (‘tentpole’) categories, among others; (b) a commitment to spend at least $300 million more annually on film production in the United States than was spent in 2025; (c) commitments regarding pricing to theaters; and (d) remedies—including divestiture—for breach.”

In other words, the combined company will commit to release a number of films in both wide release and blockbusters for five years with 30 films per year minimum for the first two years, rising to 32 films per year for the following three, will spend more on U.S. film production ($1.5 billion over the course of the agreement), and make moves to limit price increases at movie theaters. At least 20 (and later 21) of the films must be wide release, and at least four films need to be independent. At least 20% of the films will have budgets will be over $50 million.

There’s also a guaranteed 45 day theatrical window, with no SVOD window until at least 90 days. If the company falls short on its film commitments, it will be forced to divest its stake in Miramax, and for each film that it falls short, it will need to contribute $30 million toward the healthcare and retirement plans for the major Hollywood guilds.

–“The Proposed Consent Decree also requires basic cable commitments including, among others: (a) separate negotiations for the distribution of basic cable channels owned by Paramount and Warner Bros. for five years; (b) restrictions on changes to affiliate fee negotiations and agreements with distributors; (c) a restriction on the use of confidential information of one Defendant in the negotiations of affiliate fees for the other Defendant; and (d) remedies—including divestiture—for breach.”

This means that the combined company will need to negotiate pay-TV carriage deals as though they are two separate companies, which will make it harder to get the economies of scale through a combined company, but preserving competition.

Notably, the settlement does not require any divestitures of cable channels, a structural remedy that some thought could have been in the mix. Instead, the channels will have to negotiate deals as though they are separated.

Instead, if Paramount fails to follow through on its promise to negotiate separately, a court can force it to divest some channels.

–“The Proposed Consent Decree includes additional relief for continuing investments in the entertainment industry, including maintaining the production lots of both Defendants, honoring collective bargaining agreements, and committing funds for workforce training. And the Proposed Consent Decree also requires formation of a News Editorial Independence Board to establish guiding editorial and journalism principles for the combined entity’s news channels.”

These are straightforward, though the editorial independence board for CBS News and CNN was a sticking point. Connecticut AG William Tong said in a statement that “Connecticut wanted and demanded full divestiture of CNN and CBS News. We wanted to save ethical and independent journalism and news. We fought aggressively for that remedy. I am deeply disappointed that we could not do more.”

So, who’s on the board? Paramount’s board of directors will name the members: “The Editorial Independence Board shall be made up of five (5) established journalists (active or retired), each of whom shall have practiced journalism for a minimum of ten (10) years (including with credentials for at least three (3) years) (‘Journalist’). (‘Editorial Independence Board Members’). No more than two (2) Editorial Independence Board Members may be affiliated with the same political party.”

As for the studio lots: “For the duration of the Commitment Period, the Combined Entity shall not sell or close the Paramount or Warner Bros. Lots and shall use commercially reasonable efforts to operate the Lots in a manner consistent with past practices, including leasing use to third parties and producing films and television shows.”