David Ellison, Chairman & CEO, Paramount Skydance speaks on stage during New York Upfront Partnership Event 2026 at Storied NYC on April 22, 2026 in New York City.
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Noam Galai/Paramount via Getty Images
LOS ANGELES — Paramount’s owners have made a series of concessions to a coalition of 12 Democratic state attorneys general to resolve a lawsuit that endangered the media company’s $111 billion takeover bid of its larger Hollywood rival, Warner Bros. Discovery.
“The settlement is not a vote of support for this merger,” said California Attorney General Rob Bonta at a press conference Monday, adding he didn’t think the two companies should merge. But, he said, the settlement is a “strong solution that protects competition and consumers.”
The agreement, which still must be approved by a judge, will bind Paramount to operate Warner Bros. Studios and Paramount Pictures separately — at least for now. Together, they will release at least 30 films a year for two years, and 32 movies a year for the next three, or risk a financial penalty. They will also spend $300 million more annually to make movies in the U.S.
“More production means more work here at home,” Bonta said.
And the deal will also create a board intended to insulate the combined company’s TV news giants, CBS and CNN, from corporate intervention in newsroom decisions, a demand from several of the attorneys general.
A trustee will monitor Paramount’s compliance with the terms, Bonta said. If the company fails, he said the states intend to take it to court.
The states’ lawsuit and a similar one from the Writers Guild of America were the remaining hurdles in Paramount’s path to take over Warner.
“Our goal has always been to build a stronger Hollywood — one with more stories told, greater choice for consumers and stronger competition,” said Paramount CEO and Chairman David Ellison. “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.”
The Paramount sign is seen outside the Paramount Studios in Los Angeles, Calif., on December 9, 2025.
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Close ties to Trump
The Ellison family has developed close ties with President Trump.
David Ellison bought Paramount just over a year ago. He took certain steps to win the approval of Federal Communications Commission chair Brendan Carr for that deal. He went on to hire Bari Weiss as editor-in-chief of CBS News. The founder of the center-right views and news site The Free Press, Weiss has argued that the mainstream press is too reflexively critical of the president. She has fired several CBS veterans — others have chosen to leave — and appointed her own picks.
Both the purchase of Paramount and the deal to buy Warner rely on the fortunes of Ellison’s father, Oracle co-founder Larry Ellison, a Trump financial backer and adviser. Trump arranged for him to have a controlling stake of TikTok in the U.S. when it was spun off from its Chinese owner.
Given both the state of CBS News and the Ellisons’ ties to Trump, the attorneys general expressed concern about how that could affect the integrity of CNN’s news coverage. Trump has long accused CNN of being “fake news” and recently barred its journalists from the White House. On Monday, the network joined MS NOW and Politico in suing the administration for infringing on their First Amendment rights.
“Obviously the billionaires won here. These guys censored, bribed, and bullied their way to the top,” said Alvaro Bedoya, a former Federal Trade Commissioner and a senior advisor to the American Economic Liberties Project. He says Bonta, Calif. Gov. Gavin Newsom and others succumbed to pressures by Paramount.
“This is coming at a moment when people already perceive media freedom to be at risk,” he told NPR. “They watch CNN, for example, to be barred from the White House doors, and then two or three days later, hear that one of the president’s closest allies now officially owns CNN. I think that could really be a galvanizing moment.”
Connecticut Attorney General William Tong said in a statement that Paramount resisted the creation of an independent editorial board until last week.
“Connecticut wanted and demanded full divestiture of CNN and CBS News,” he said. “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.”
A Hollywood force laden with debt
Paramount’s acquisition of Warner will bring together the two iconic movie houses, CBS and CNN, a plethora of cable channels, the Paramount Plus and HBOMax streaming platforms, and such major franchises as DC Comics, Harry Potter and Star Trek.
Ellison argues Paramount needs to bulk up to compete against digital titans Netflix, Amazon and Apple, as well as Disney.
The attorneys general stepped in and filed their antitrust lawsuit, citing fears that the consolidation of similar competitors could lead to mass layoffs in the entertainment industry, fewer films being made, higher charges to movie theaters, and higher ticket prices for moviegoers.
David Ellison — who helped to finance Tom Cruise’s Mission Impossible franchise and the Top Gun sequel — is by all accounts enamored of the film-making industry. But keeping his promise to make 30 films a year will be financially difficult. Paramount borrowed more than $54 billion to construct a bid for Warner that the company couldn’t refuse, even though it had agreed to a competing bid from Netflix. Warner has its own debt, meaning the combined company will owe up to $87 billion.
As a result, unions at various divisions of the two companies are predicting significant layoffs. Bonta tried on Monday to reassure entertainment workers that it would not happen.
On September 18, the FCC approved an enormous infusion of foreign cash to finance the deal. The merged company will be 49.5% owned by foreign interests, including the sovereign wealth funds of Saudi Arabia, Qatar, and Abu Dhabi. And the agency ruled that it could go up to 100%. Paramount has promised that its stakes would consist of silent, non-voting shares.
Hollywood was at risk of losing Paramount which had considered moving its operations to Tennessee or Texas if the merger with Warner Bros. was scuttled.
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The idea that a major U.S. broadcast company or TV news outlet could have such a degree of foreign ownership was unthinkable in an earlier age, according to industry executives, outside analysts and former federal officials. Australian-born Rupert Murdoch famously became a U.S. citizen so that he could take over U.S. television properties in the 1980s.
Eager to avert hefty fee
The antitrust trial was to start in March. And the judge had ordered mediation for mid-October. But dragging out the legal battle would have been costly to Paramount.
In wooing Warner shareholders, Paramount had pledged $7 million for each day past October first that it failed to wrap up the deal.
Bonta faced pressure too. Paramount made it known that it was hunting for large new properties in Nashville, Tenn. and Austin, Texas, to house its headquarters and studios. Such prominent California Democrats as Gov. Newsom, former state attorney general and U.S. Secretary of Health and Human Services Xavier Becerra — who is running to succeed Newsom — and Los Angeles Mayor Karen Bass urged a compromise to keep Paramount in Hollywood.
“The A.G’s capitulation marks a new low,” said Jessica Gonzales, a member of the media advocacy organization Free Press. “It’s a sad day for us who’ve been opposing this merger because it will cut jobs and raise prices, all as it consolidates the media into fewer hands. This weak deal contains nothing but unenforceable, empty Paramount promises.”
Additionally, Paramount asked the court to require the states to put up a bond to cover the money it would have to pay Warner shareholders because the trial would imperil, or at least significantly delay, the deal. Though the judge had not yet ruled, no state wanted to have to fork over money for that privilege — especially considering Paramount had voluntarily offered that fee to Warner as a sweetener to secure the deal.
NPR’s Mandalit del Barco reported from Los Angeles with NPR’s David Folkenflik in New York
This story originally appeared on NPR
