Judge Clears $110B Paramount Merger With Warner Bros.

A federal judge on Wednesday approved Paramount Skydance's settlement with state attorneys general, removing the final legal obstacle to its takeover of Warner Bros. Discovery. The one-hundred-ten-billion-dollar deal is expected to close on October 6, the company said.

Judge Araceli Martínez-Olguín issued the order accepting the settlement, which Paramount reached with California and other states on September 21. The states, led by California Attorney General Rob Bonta, sued to stop the Paramount merger in July, arguing it would reduce competition and could threaten the journalistic independence of CNN, according to NBC News. The deal had already been cleared by the U.S. Justice Department, the European Commission and regulators in dozens of other countries.

The judge had first ruled in the states' favor, blocking Paramount from taking control of Warner Bros. Discovery for what turned into months of delay, CNN reported. In mid-September, the two sides began intensive settlement talks. Under the agreement, Paramount accepted behavioral remedies rather than the structural changes Bonta had first sought.

Those remedies include a commitment to release at least thirty films a year and to invest more than one billion dollars in U.S. film production and worker training. The settlement also creates protections for editorial independence: the merged company's board will monitor adherence to ethical journalism standards and independence from ownership. Bonta said the arrangement is meant to "ensure independent, objective, fact-based reporting at CBS News and at CNN."

Martínez-Olguín wrote that the agreement followed "highly contested, however brief, litigation" and several rounds of in-depth negotiations. A California Justice Department spokesperson said the state was pleased with the ruling and that the settlement resolves its antitrust concerns, "protects competition and consumer choice" and centers the needs of California workers.

Kreiz becomes co-CEO

Minutes after the judge's order, Paramount chief executive David Ellison announced that Mattel chief executive Ynon Kreiz would become co-CEO of the combined company. Kreiz, who led Mattel for eight years, joins Paramount on October 5 and will take a seat on the board, according to a joint statement.

Under the arrangement, Ellison remains chairman and chief executive, leading strategy, creative direction and technology, while Kreiz oversees day-to-day operations and the integration of the two businesses. Ellison described the setup as "a division of labor" with "clear reporting lines," saying it lets him concentrate on long-term strategy and creative direction. He said the combined company would be "creator-first, tech-forward and built to scale globally."

The Paramount merger brings together CBS News with CNN, HBO Max with Paramount+, the Warner Bros. and Paramount film studios, and MTV with Discovery, forming what CNN called "one of the biggest media companies in the world." So far, Ellison and Kreiz are the only confirmed members of the merged company's board. Paramount said the new name of the combined company could be announced as soon as Thursday.

The court's approval arrived on the last day before a ticking fee took effect on October 1. Under the fee, Paramount would have paid Warner Bros. Discovery shareholders twenty-five cents per share each quarter — more than six hundred million dollars every three months — if the deal had not closed by September 30.

Shakeups and skepticism

Management changes are already underway. Paramount streaming chief Cindy Holland is departing, a signal that HBO chief Casey Bloys will run the merged streaming platform, CNN reported. David Ellison's father, Larry Ellison, is personally backing the deal with tens of billions of dollars of his own fortune, according to NBC News. David Ellison had earlier installed former New York Times opinion writer Bari Weiss to run CBS News, an appointment that drew criticism from longtime correspondents.

The Block the Merger coalition, a group of small businesses and independent creators, filed an amicus brief urging the court to reject the settlement. "The brief argues that small business owners and independent contractors will not receive the same handouts that members of major unions will if the consent decree is not upheld," the group wrote, adding that "they do nothing to protect fair competition."

Investors have been cautious: Paramount shares have fallen more than twenty percent since the start of the year, NBC News reported. The next markers are Kreiz's October 5 start date and the October 6 closing.