Paramount Skydance reaches settlement with states over Warner Bros Discovery merger

• Paramount Skydance reportedly reached a settlement with California and other states challenging its proposed $110 billion acquisition of Warner Bros Discovery.
• The agreement could remove a major regulatory obstacle to completing one of the largest media mergers in history.
• Reported concessions include commitments related to production investment, editorial independence and potential business structure changes.

Paramount Skydance (NASDAQ:PSKY) has reportedly reached a settlement with California and other states that challenged its proposed $110 billion merger with Warner Bros. Discovery, according to Bloomberg News.

The settlement, reported by Bloomberg citing a person familiar with the matter, follows negotiations that accelerated after several states that had opposed the original deal terms reportedly agreed to revised conditions.

The agreement is expected to remove a significant legal hurdle for the proposed combination, which would bring together two major Hollywood film studios, two streaming platforms and large cable news operations under common ownership.

Paramount Skydance and Warner Bros. Discovery did not immediately comment on the report.

Following the announcement, Warner Bros. Discovery (NASDAQ:WBD) shares rose nearly 10%, while Paramount shares gained approximately 7% in trading.

Reports indicate that potential concessions discussed during negotiations included a $1.5 billion investment in California film production, commitments regarding studio properties, and penalties if production commitments are not met after the merger.

Additional reported measures include possible cable channel divestitures and the creation of independent editorial oversight structures for CBS and CNN.

A coalition of 12 state attorneys general led by California Attorney General Rob Bonta filed a lawsuit in July seeking to block the merger, arguing that the transaction could reduce competition in areas including theatrical film distribution and basic cable channel licensing.

The settlement would help Paramount avoid a reported $7 million-per-day fee owed to Warner Bros. Discovery shareholders if the transaction does not close after September 30.

The merger has already received clearance from competition regulators in several international jurisdictions, including the European Union and the United Kingdom.