Paramount Skydance merger settlement clears path for Warner Bros. Discovery deal

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Paramount Skydance merger clears

Highlights

Paramount and Skydance reached a settlement with 12 state attorneys general, allowing the $110 billion merger to proceed after being challenged on antitrust grounds.
The deal, which unites Paramount, Warner Bros. Discovery, CBS, a TV network portfolio, and both companies' streaming services, is expected to close by Sept. 30.
Paramount agreed to pay a ticking fee of 25 cents per share per quarter to Warner Bros. Discovery shareholders after Sept. 30, adding approximately $650 million in value each quarter until closing.

Settlement moves deal toward closing

As first reported by CNBC, Paramount Skydance is set to settle with a group of state attorneys general that sued to block the merger on antitrust grounds. Multiple reports said Monday that the agreement allows the $110 billion transaction to move forward after the case had been scheduled for trial in March.

The lawsuit was led by California Attorney General Rob Bonta and 11 other states, which filed the case in mid-July over competition concerns in film and pay TV. Spokespeople for Paramount and Bonta do not immediately respond to requests for comment in the source report.

The merger has already won approval from U.S. and other international regulators, and Paramount previously tells investors it expects to close the deal by Sept. 30. The combination would unite Paramount and Warner Bros. Discovery film studios, CBS, a portfolio of television networks, and the Paramount+ and HBO Max streaming services.

Delay risk and cost pressures

The court challenge had left the acquisition in limbo and previously prompted Paramount to agree to delay the merger until June 2027 while the case played out. That timeline raises the risk of a prolonged closing process for one of the media sector's largest pending transactions.

Under the merger agreement, Paramount also agrees to a so-called ticking fee that starts after Sept. 30. The provision means an added 25 cents per share, per quarter to Warner Bros. Discovery shareholders until the transaction closes, adding an estimated $650 million in cash value to the deal each quarter.

Our earlier coverage on the settlement talks between Paramount Skydance and California’s attorney general noted the negotiations aimed to remove one of the last major legal obstacles to the proposed Warner Bros. Discovery merger. We outlined potential concessions—including large production investment commitments and assurances around studio assets—while also flagging that any delay could become costly due to fee provisions tied to closing timelines.

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