A federal judge in Oakland has approved a settlement that clears the way for Paramount Skydance CEO David Ellison to complete his $111 billion acquisition of Warner Bros. Discovery, resolving a months-long antitrust dispute.
U.S. District Judge Araceli Martínez-Olguín signed the settlement agreement on Wednesday, ending a lawsuit led by California Attorney General Rob Bonta and 11 other state attorneys general. The group had challenged the merger, arguing it would reduce competition in the entertainment industry. The judge did not impose new conditions beyond those agreed to in a settlement reached last week.
The merger consolidates a vast portfolio of media assets under the Ellison family, which already owns Paramount and CBS. The combined company will add HBO, CNN, TBS, HGTV, and rights to major franchises such as Batman, Harry Potter, and TV shows like "Friends" to its holdings. David Ellison’s father, Larry Ellison, founder of Oracle Corp., also holds significant tech investments, including a stake in TikTok and backing for artificial intelligence initiatives.
Under the settlement, which spans five years, the merged entity must release at least 30 films annually in theaters, invest an additional $1.5 billion in domestic film production, and allocate $47.5 million to support workers potentially impacted by the merger. To safeguard journalistic independence, the agreement calls for a five-member panel to oversee editorial practices at CBS News and CNN, though critics note that the Ellisons retain control over board appointments, calling its independence into question.
The pact also prohibits the sale or closure of Paramount’s Melrose Avenue campus in Hollywood and Warner Bros.’ Burbank studio lot, requiring operations to continue consistent with historical practices for at least five years. Additionally, Paramount will face limitations on its leverage during negotiations for basic cable TV channel distribution, with an independent monitor assigned to oversee compliance.
Despite the legal approval, the merger has faced significant opposition in Hollywood. Critics have decried the settlement as insufficient and have accused Attorney General Bonta of yielding to political pressures from California Governor Gavin Newsom and Los Angeles Mayor Karen Bass, who urged halting the legal fight. The Block the Merger coalition warned the deal could lead to substantial job losses, diminished creativity, weakened independent journalism, and threats to First Amendment rights. Los Angeles County estimates the merger could eliminate approximately 4,500 local jobs amid integration efforts and cost-cutting measures. Paramount has pledged to reduce spending by $6 billion over three years.
Earlier this month, Senator Cory Booker called for an independent review to assess whether the settlement adequately addresses antitrust concerns outlined in the Clayton Antitrust Act. During a hearing, Judge Martínez-Olguín questioned elements of the settlement, including its duration and certain divestiture provisions related to the Miramax film studio, and sought explanations for the withdrawal of several initial legal demands.
The resolution marks the end of intense negotiations and litigation that delayed the merger by roughly two months. The Writers Guild of America had also filed its own antitrust lawsuit opposing the deal. Paramount’s lobbying efforts intensified amid fears the company might relocate operations outside California if the lawsuit persisted, prompting several politicians to publicly support a settlement.
Financing for the merger is progressing, with Paramount arranging approximately $44 billion in bonds and $7.5 billion in loans to fund the acquisition, on top of over $87 billion in combined debt. Larry Ellison has committed to backing $47.5 billion in equity required to close the transaction. Additionally, sovereign wealth funds from Saudi Arabia, Abu Dhabi, and Qatar have agreed to invest $24 billion, securing substantial ownership stakes.
In a related announcement, Paramount named Mattel CEO Ynon Kreiz as co-chief executive officer of the newly merged company. Kreiz is expected to leave Mattel at the end of the week and will oversee day-to-day operations of the combined Paramount-Warner Bros. Discovery.