Paramount's Warner settlement would put $47.5 million behind workers it plans to cut

Paramount Skydance's proposed settlement with 12 state attorneys general would commit the combined company to spend $47.5 million over five years on training and career development for workers displaced by its takeover of Warner Bros. Discovery. Paramount has said it will look for roughly $6 billion in savings through job cuts in "duplicative operations" once the deal closes, according to the Associated Press.

The attorneys general, led by California's Rob Bonta, filed the proposed consent decree on Monday in the Northern District of California, where Judge Araceli Martínez-Olguín had scheduled an antitrust trial for March. It still requires her approval. AP put the transaction at $81 billion; NBC News described the merger as a $110 billion deal. Shares in both companies rose more than 10% as reports of a settlement circulated.

Paramount had commercial reasons to stop litigating. It owed Warner Bros. Discovery shareholders a ticking fee of 25 cents a share each quarter if the deal did not close by Sept. 30, a penalty worth more than $600 million every three months, NBC News reported.

What the states actually bought is output. Under the decree, the combined company must release at least 30 films a year in the first two years after closing, 20 of them wide releases on at least 2,000 screens, rising to 32 films with 21 wide releases in years three through five. At least four films a year must be independent, and at least half must be produced or jointly produced in-house. Twenty percent must be tentpoles carrying production and acquisition budgets of at least $50 million, released on 3,000 or more domestic screens within four weekends. Each qualifying film gets a theatrical window of at least 45 days and a 90-day holdback from Paramount+ or any successor streaming service.

Miss the release target, and the company must divest Miramax after a six-month cure period, plus pay $30 million for every film short of the commitment. Half of that money goes to health care and retirement trust funds for the WGA, IATSE, the DGA, the Teamsters and other production unions, 40% to the Motion Picture & Television Fund and 10% to a National Association of Attorneys General antitrust enforcement fund. The payment is non-refundable and applies even if the company later cures the shortfall.

The domestic production commitment is the clearest labor-market lever in the decree, and it is partly contingent on legislation that does not yet exist. Paramount must spend at least $300 million a year more on U.S. production than the companies spent in 2025, $1.5 billion over the five-year commitment period. The attorneys general say about 5% of Paramount's production is currently in the United States. If Congress enacts an uncapped federal film tax credit of at least 20%, the decree ratchets the requirement to U.S. production-day levels of at least 20% in years one and two and 30% thereafter. If California or New York then passes an uncapped state credit of at least 43%, stackable with the federal one and covering above- and below-the-line spend, the floor rises to 40%. Bonta said he will work with the California legislature next session to uncap the state's film and television tax credit.

The Writers Guild of America, which had its own suit headed to the same trial, settled separately and got the only explicit job protection in the package: Paramount agreed to prohibit writer layoffs at CBS News for five years and to pay $17.5 million into the guild's health fund along with attorneys' fees. The union was blunt about why it settled. "We continue to believe the merger will cause damage to writers and the industry at large," it said in a statement, adding that "as a nonprofit, the WGA must contend with the reality of forging ahead alone, with no backing from government enforcers, with a complex antitrust lawsuit that would cost millions of dollars to pursue through trial."

On the news side, the settlement creates an editorial independence board of independent journalists to oversee CNN and CBS News, with a set of standards and principles.

The decree also bars the company from selling or closing either studio lot, Paramount's on Melrose Avenue or Warner's in Burbank, during the commitment period, requires it to operate them consistent with past practice including third-party leasing, and obliges it to honor existing collective bargaining agreements and development contracts already signed in plaintiff states. Cable affiliate fees for Paramount and Warner basic channels must be negotiated separately for five years; a material breach that goes uncured would force divestiture of BET, VH1, Comedy Central, Smithsonian, Destination America and Science. A compliance monitor and monitoring trustee oversee the whole arrangement.

IATSE, the Teamsters, SAG-AFTRA and the Directors Guild all welcomed the outcome. The DGA's national executive director, Russell Hollander, flagged what the decree does not reach: "We intend to continue our discussions with Paramount regarding domestic television production, with a focus on ensuring a competitive and robust marketplace that protects jobs." The film floor carries no television equivalent.

Bonta was careful to separate the settlement from the merger itself. "I don't think these two companies should merge," he said at a Monday press conference, adding that it was "not something that we are focused on with our resolution here." Alvaro Bedoya, a senior adviser at the American Economic Liberties Project and a former FTC commissioner, went further in a statement: "Layoffs will follow. People from L.A. to Atlanta will lose their jobs, small businesses will lose their contracts, your cable bill and movie ticket will be even more expensive."