Done! Paramount Settles Antitrust Suit, Set To Seal Deal For Warner Bros. Discovery
Paramount has settled an antitrust lawsuit brought by a dozen State Attorneys General led by California’s Rob Bonta, the last obstacle to closing its acquisition of Warner Bros. Discovery, Deadline has confirmed.
Details were scant but there will be concessions. The deal should be formally announced later this morning. Deadline hears that Paramount has agreed to some CNN guardrails, financial penalties linked to CEO David Ellison‘s 30 movies a year commitment and some sort of separation of the studios for a period. A report in the WSJ said the company will avoid having to sell cable networks.
The road here has been a long one marked by a tidal wave of industry opposition, a bruising legal fight, and threats by Paramount CEO David Ellison to exit Hollywood and relocate Paramount to another state. Frontrunners Texas and Tennessee will not, it turns out, be hosting a major film and TV studio.
The AGs filed their antitrust lawsuit in July, a month after the U.S. Department of Justice approved the merger, and the judge in the case set a March trial date. The two sides were scheduled to meet at a court-ordered settlement conference in mid-October but Paramount was very eager to reach a deal before Oct. 1, the start of a $7 million-a-day (25 cents per share per quarter) payout the company would owe Warner if the deal had not closed. Called a ticking fee, it’s a rarely used sweetener in M&A that Par employed to convince WBD’s board of directors to accept its offer, and that might have cost it close to $2 billion.
Bonta had asked for structural remedies that were hard for Ellison to accept. But he and his team came to the table recently with ideas and things began to move.
Deal In Flux
Paramount announced in February it had entered into a definitive agreement to acquire WBD for $31 a share in a deal that valued WBD at $81 billion in equity value and $110 billion in enterprise value. Paramount said the combination would yield over $6 billion in synergies. The transaction was funded by $47 billion in equity and $54 billion in debt syndicated out by a consortium of banks and institutions. Oracle co-founder Larry Ellison, David’s father, personally guaranteed the bulk of the equity portion.
The merger moved from the DOJ through approvals by the EU, the U.K. and other territories. David Ellison continued to anticipate a close in the third quarter of 2026.
But the AGs lawsuit stopped things cold. It called out alleged antitrust violations in three markets – cable programming, wide release films, and blockbuster films and won a temporary restraining order early on. Paramount agreed not to close the deal while the case was in play.
The WGA also sued to block the merger, with its case running alongside the States.
A public relations battle commenced with Paramount insisting the combination would revitalize the entertainment sector. A wide range of industry players disagreed, predicting massive job losses, especially given combined company’s projected $80 billion debt load. But pressure had also ratcheted up on Bonta to settle as Paramount continued to threaten a Hollywood exit and the risk of two major players in limbo through the spring posed its own risks.
The Chase
Ellison, 43, has amassed a media empire in record time. He launched his aggressive pursuit of WBD shortly after his Skydance Media closed an $8 billion acquisition of Paramount, buying Shari Redstone’s controlling stake in another twisty chase. He started with an escalating series of hostile bids for WBD that were rejected by its board and CEO David Zaslav, but did push Warner to formally put itself up for sale. Several other suitors stepped up. In December of 2025, Warner announced a deal to sell its studio and streaming assets to Netflix.
Undeterred, Ellison continued to sweeten the terms of his offer. Ultimately, WBD ditched Netflix and in favor of a richer Paramount deal for the entire company. The giant streamer declined to counter, instead walking away with a $2.8 billion breakup fee.
Larry Ellison has been a friend and was major donor to Donald Trump’s presidential campaign. He was also the biggest investor in Skydance. To secure FCC approval for the Paramount deal, the David Ellison company pledged to eliminate diversity, equity, and inclusion (DEI) programs and establish a CBS News ombudsman position to review bias complaints. He installed Barry Weiss, the polarizing founder of website The Free Press, to run CBS News, all of which sparked fears of similar shakeup at CNN if the deal went through.
The Paramount-AG settlement follows one final approval, from the Federal Communications Commission, On Sept. 17. The agency waived a Congressionally mandated 25% cap on foreign broadcast ownership to allow a trio of Middle East sovereign wealth funds, from Saudi Arabia, Qatar and the United Arab Emirates, to own 49.5% of the merged company. They stepped in as investors with a backstop by Larry Ellison. Paramount said the funds will hold non-voting stock and have no say in governance, operating or content decisions.
