Key terms of Paramount's Warner Bros Discovery settlement with US states

Paramount Skydance and Warner Bros Discovery have reached a settlement with California and 11 other US states to clear the way for their merger, according to a joint motion filed by the companies on Monday. The $110 billion buyout of Warner Bros Discovery will create a media powerhouse combining major studios and networks, including CNN and CBS, in an industry upended by streaming. Below are the key terms and conditions of the proposed settlement filed in the US District Court for the Northern District of California: **News editorial independence** - **Editorial board:** The settlement mandates the creation of an independent News Editorial Independence Board to maintain objective, fact-based reporting standards and safeguard editorial autonomy across CBS News and CNN. **Compliance and remedies** - **Independent oversight:** An independent Monitoring Trustee, an internal Compliance Monitor and a five-state oversight committee will oversee compliance with the decree. - **Divestiture penalties:** A breach of core terms can trigger severe court remedies, including structural asset divestitures and financial penalties. Oversight will be managed by the independent Monitoring Trustee, internal compliance monitor and committee of five plaintiff states. - **Merger clearance:** The settlement dissolves the July 24, 2026 "No-Close Order," allowing the companies to complete the transaction without an admission of liability or wrongdoing under Section 7 of the Clayton Act. **Theatrical film production and release quotas** - **Production volume:** The merged company must release a minimum of 30 theatrical films per year in the first two years of the decree, increasing to 32 films per year for the following three years. - **Independent and tentpole mix:** Each year, the slate must include at least four independent films and at least 20% blockbuster or "tentpole" releases. - **Spending floor:** The company must spend at least $300 million more annually on domestic film production compared with 2025 levels, representing a minimum commitment of $1.5 billion over five years. - **Per-film shortfall penalty:** For each film below the annual quota, the company must pay $30 million. Of this, $15 million would go to Hollywood labor health and retirement trust funds, $12 million to the California Film and Television Fund and $3 million to a bipartisan national attorneys general fund for antitrust enforcement, according to California Attorney General Rob Bonta. - **Indie film fund:** Paramount must establish and fund an annual independent film fund dedicated to acquiring titles from indie filmmakers. - **Theater protections:** Enforceable restrictions on pricing and distribution terms offered to movie theater operators. Relevant fees charged to theater exhibitors must remain flat for three years. - **Tax incentive triggers:** If a federal film tax credit of at least 20% passes, US production must rise to 20% of all film production in years 1 to 2 and 30% in years 3 to 5, climbing to 40% if California or New York passes an uncapped incentive. **Basic cable licensing and carriage** - **Separate negotiations:** For five years after the merger, Paramount and Warner Bros must negotiate distribution and carriage deals for their respective basic cable channels independently to preserve market competition. - **Information firewalls:** The settlement restricts the sharing or use of one legacy company's confidential licensing and affiliate data in negotiations involving the other. - **Affiliate fee guardrails:** Limits changes to affiliate fee negotiations and agreements with pay-TV and satellite providers to protect consumer pricing. **Labor, workforce and studio facilities** - **Studio lots:** The combined company must maintain the physical production lots of both legacy studios. - **Collective bargaining:** The merged company is required to honor all existing collective bargaining agreements and negotiate in good faith with industry labor unions. - **Workforce investment:** The company must allocate $9.5 million annually toward entertainment industry career development, workforce training, educational film programs and community arts organizations.

Key terms of Paramount's Warner Bros Discovery settlement with US states

Settlement terms outlined in court filing

News editorial independence and compliance

Film production, cable and labor requirements

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