Twelve States and Writers Guild Settle Antitrust Suits Over Paramount Skydance-Warner Bros. Discovery Merger

A coalition of twelve states and the Writers Guild of America reached settlements on Monday, Sept. 21, 2026, resolving lawsuits that had challenged Paramount Skydance's acquisition of Warner Bros. Discovery, according to reporting carried by KOB and NBC Miami. The agreements extract new commitments from the company on film output, cable-carriage negotiations and news-division independence in exchange for dropping legal opposition to the deal. KOB described the transaction as an "$81 billion deal," while NBC Miami and MediaPost cited a $110 billion valuation, a discrepancy that appears unresolved across the available reporting.

Film Output and Worker Commitments

Under the states' settlement, Paramount Skydance pledged to increase domestic film production over five years by at least $1.5 billion, or $300 million annually, and to commit another $47.5 million to a workforce fund for training and career development of employees displaced by the merger, according to KOB and NBC Miami.

The company also agreed to release 30 films per year for the first two years of the deal, rising to 32 films annually in each of the following three years, NBC Miami reported. The two-film gap between the first tier and the second amounts to a 6.25% difference measured against the 32-film requirement (30 minus 32, divided by 32, multiplied by 100), our calculation of those reported figures. If Paramount Skydance misses those targets, the states say the company must divest Miramax Studios and pay $30 million per missed film into health care and retirement trust funds tied to the Writers Guild, IATSE and the Directors Guild, per KOB and NBC Miami.

Cable Carriage and News Independence

The settlement also requires the merged company to negotiate carriage and licensing deals for Paramount-owned and Warner-owned basic cable channels separately for five years, a condition KOB reported the states say will help keep consumer prices in check. The pledge explicitly excludes premium cable, streaming services and broadcast, according to MediaPost.

Separately, the company must form a "News Editorial Independence Board" of independent journalists tasked with setting editorial principles for CBS News and CNN based on existing policies and monitoring those newsrooms, KOB and MediaPost reported.

The Writers Guild's Separate Deal

In its own settlement, the WGA said Paramount agreed to prohibit writer layoffs at CBS News Broadcast for five years and to pay $17.5 million into the union's health fund plus its attorneys' fees in the litigation, according to NBC Miami. New York Attorney General Letitia James said she helped secure that $17.5 million commitment and would monitor compliance, per KOB. The union filed court papers seeking to dismiss its own July suit, explaining that as a nonprofit "with no backing from government enforcers," continued litigation would have cost millions of dollars, while maintaining the merger would still damage writers, KOB reported.

Court Approval Still Pending

The settlement was not final as of Monday evening. State attorneys general asked U.S. District Judge Araceli Martinez-Olguin of the Northern District of California to revoke her order temporarily blocking the merger and approve the agreement, according to MediaPost. Paramount had previously agreed to freeze the transaction until the antitrust challenge was resolved or June 1, 2027, whichever came first, per KOB and NBC Miami.

Market Reaction and Deal Pressure

Shares of both Paramount and Warner Bros. Discovery rose more than 10% as reports of the settlement circulated early Monday, NBC Miami reported. There was no SKYD ticker trading on the settlement date itself; the combined company began trading under that symbol only when the merger closed on Oct. 6, 2026, moving its Class B stock from Nasdaq to the New York Stock Exchange and changing its ticker from "PSKY" to "SKYD," according to Variety and Deadline.

Part of the urgency behind settling appears tied to deal economics rather than antitrust merits alone. Paramount had agreed to pay Warner shareholders a "ticking fee" of 25 cents a share each quarter if the transaction didn't close by Sept. 30, a penalty NBC Miami valued at more than $600 million every three months, or roughly $7 million a day, per KOB.

Praise and Pushback

Paramount Skydance CEO David Ellison called the state and WGA agreements "complete clearance" for the merger and thanked California Attorney General Rob Bonta, the WGA and Gov. Gavin Newsom, according to KOB and NBC Miami. Bonta, however, said the settlement was about "protecting people's careers, the lives they've built here in California, the livelihoods their families rely on," while maintaining it was not a vote in favor of the merger, per KOB.

Critics argued the remedies fell short. Public Knowledge legal director John Bergmayer called the settlement "disappointing" and said it "does not address the central problem with this merger: the loss of competition," per MediaPost. Former FTC commissioner Alvaro Bedoya said "billionaires have yet again bribed, censored, and bullied their way to the top," according to KOB. Connecticut Attorney General William Tong said he had sought full divestiture of CNN and CBS News and that Paramount had refused any editorial-independence terms just a week earlier, adding that "the complete abdication of the federal government's enforcement role" left states at a disadvantage, per KOB. SAG-AFTRA said the terms addressed "some of our deep concerns about production levels and investment in U.S. production" while calling them "the lowest standards that our employers must meet," according to NBC Miami. Ellison said the combined company would remain based in Los Angeles, telling reporters "We aren't going anywhere," though the settlement itself does not require the headquarters to stay in California, per KOB.

Debt Load and Deal Close

The merger closed Tuesday, Oct. 6, 2026, under the name Skydance. Variety projected the combined company would carry debt "north of $80 billion" after assuming Paramount and WBD's existing obligations and raising new financing, while Deadline put the starting debt load at some $80 billion. Neither outlet linked the settlement's film-spending, workforce-fund or union payments to any change in that projected debt.

Bottom Line

The settlement removes a major legal obstacle that had kept the Paramount Skydance-Warner Bros. Discovery merger frozen, trading commitments the states described as "court enforceable" on film output, cable negotiations, newsroom independence and union protections for the states' and WGA's agreement to drop their suits. Court approval was still pending as of Monday evening, and several state officials and outside critics made clear they view the remedies as incomplete rather than an endorsement of the combination itself.