A federal judge on Wednesday approved a settlement between Paramount Skydance and 12 states that had sued to block its takeover of Warner Bros. Discovery, removing the last major legal obstacle to one of the largest media mergers in history, reported Xinhua.
US District Judge Araceli Martínez-Olguín said the proposed consent decree was a “fair, reasonable, and good-faith approach to address the competitive harms” alleged by the states.
Her order allows the companies to move towards closing a transaction that would unite two of Hollywood’s five remaining legacy studios, the Paramount+ and HBO Max streaming services, and television networks including CBS, CNN, MTV, TBS and the Food Network.
The ruling resolves an antitrust suit filed in July by top prosecutors from 12 US states, led by California attorney general Rob Bonta.
The states alleged that combining Paramount and Warner Bros. would reduce competition in theatrical film distribution and cable programming, potentially leaving consumers with fewer choices and higher prices.
The litigation had delayed the deal even after it secured regulatory clearances from the US justice department and more than 60 foreign countries.
Last week, the states agreed to settle those claims following new commitments from Paramount, including a pledge to invest US$1.5 billion in US film and television production over the next five years.
Under the settlement, Paramount agreed to release at least 30 films theatrically in each of the first two years and 32 annually in the following three years.
It is also required to negotiate separate deals for Paramount- and Warner-owned basic cable channels over the next five years and form a “News Editorial Independence Board” to monitor news operations at CBS and CNN within 180 days of completing its acquisition of Warner Bros.
It must also provide support for workers affected by the merger.
California attorney general Rob Bonta said when the settlement was announced on Sept 21, it was designed to protect workers and their families.
He also stressed that accepting the agreement did not endorse the merger.
Critics, including the Block the Merger coalition and media advocacy group Free Press, urged the court to reject the settlement.
They argued that the behavioural commitments were too weak and that the combination could lead to job cuts, less independent filmmaking, higher consumer costs and diminished editorial independence.
Martínez-Olguín said at a hearing last Thursday that the court was not merely a “rubber stamp” on a settlement of this kind and that she, like many others, had questions.
But she wrote in Wednesday’s order that hopes for the settlement terms to go further “do not rise to the level of legal violations upon which the Court can reject the parties’ negotiated resolution”, calling the agreement a reasonable factual and legal resolution of the dispute.
The court will retain authority to enforce the settlement during its five-year term.
Hours after the ruling, Paramount announced that Mattel CEO Ynon Kreiz would join the company on Oct 5 and become co-CEO of the merged business alongside David Ellison when the transaction closes.
The deal has been valued differently depending on whether debt is included.
Paramount and industry publications have described it as a roughly US$110 billion transaction.
Paramount has indicated that it could close the acquisition in early October, with the companies now expecting the deal to close on Oct 6.
