Paramount Skydance Corp. has reached a settlement with California and other states suing to block its proposed acquisition of Warner Bros .
Discovery Inc., according to a person familiar with the matter.
Paramount, the parent company of CBS, MTV and other media businesses, announced in February that it was buying Warner Bros. after outbidding rival Netflix Inc. The terms are said to include a financial penalty if the company fails to deliver on its promise to distribute 30 films per year in theatres. The $110 billion deal will combine two of Hollywood’s most storied movie studios, two major subscription streaming services and two of the largest owners of cable-TV channels.
Settlement talks came to fruition over the weekend after four states that had opposed the terms of a deal outlined with California conceded, said the person, who asked not to be named, discussing confidential negotiations. Lawyers for the states worked all night on the agreement, the person said. Four states — Massachusetts, New York, Connecticut and Minnesota — had been holdouts on a possible settlement, but ultimately concluded the expense of the legal battle was not justifiable without California at the helm, the person said. The states that held out longer did succeed over the past week in securing independent editorial boards for CBS and CNN as part of the deal, the person said.
The settlement, which is expected to be announced later today, paves the way for one of the largest mergers in Hollywood history.
Discussions included Paramount paying $30 million for each film that falls short of that goal, Bloomberg reported. 12 state attorneys general and the Writers Guild trade union sued to block the merger, saying it would stifle competition for film and cable-TV distribution, raise prices for consumers, and, in the writers’ case, lower their wages Although regulators in nearly 70 jurisdictions blessed the acquisition. Paramount had made offers in recent weeks to try to settle the suits, including promises to release 30 films a year in theatres and to increase TV show production.
It could also be forced to sell its stake in Miramax, the studio behind movies such as Pulp Fiction, if it fails to meet the target. A trial date was set for March.
