Paramount Skydance has reached a settlement with California and 11 other US states that went to court to stop its roughly $110 billion takeover of Warner Bros. Discovery, Reuters reports. The company also settled a lawsuit brought by the Writers Guild of America (WGA).
The settlement closes out a dispute that dates back at least to August, when Paramount demanded that the states post a $1.88 billion bond to cover its losses from the delay. Most of the terms Paramount has now accepted run for five years.
Over that period, Paramount will raise its spending on US film production by at least $300 million every year. It must release at least 30 films a year for the first two years after the deal closes, and 32 a year for the following three. Paramount had already promised the AMC and Regal cinema chains the 30-film floor, and that figure is now part of the settlement. The studio is also among those eyeing film rights to Xbox games.
The settlement also spells out what that slate should look like. At least four films a year must be independent projects, and blockbusters must make up no less than 20% of the output. For every film short of the target, Paramount could pay $30 million, with much of that money going to funds that support industry workers.
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Movie theaters get a separate commitment: Paramount can’t raise its fees for them for three years. At the same time, the company avoided being forced to sell major assets, including CNN or some of its most profitable film franchises. The agreement also leaves the door open to a sale of Miramax, which had earlier been floated as a restructuring option.
The news business faces its own restrictions. Paramount will set up a board to safeguard the editorial independence of CBS and CNN, and an independent monitor will oversee compliance with the whole agreement. For five years, the cable networks of Paramount and Warner Bros. Discovery must also negotiate carriage of their core channels on their own.
Antitrust regulators have already cleared the purchase. Paramount and Warner Bros. Discovery expect about $6 billion in savings once the deal closes, but the combined business will inherit roughly $80 billion in debt.
