Paramount may settle states’ challenge to Warner Bros. deal this weekend
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Paramount Theatre on Congress Avenue in Austin, Texas. File photo. |
LOS ANGELES — September 18, 2026
Paramount Skydance could reach a settlement with California and 11 other U.S. states as soon as this weekend over its planned $110 billion acquisition of Warner Bros. Discovery, according to people familiar with the discussions.
Possible terms include independent monitoring of CNN's content and a commitment by the combined company to release a certain number of films in theaters, the people said. Neither a final agreement nor the full terms of any settlement have been confirmed.
The talks concern one of the last major legal obstacles facing Paramount's effort to acquire Warner Bros. Discovery. The proposed combination would bring major entertainment and media assets under one company, including Paramount's film operations alongside Warner Bros., CNN, HBO, the "Harry Potter" franchise and rights to NFL games.
Paramount's shares gained nearly 7% in after-hours trading following the report, while Warner Bros. Discovery shares rose 8.4%. The market moves reflected investor reaction to the possibility that the legal challenge could be resolved and the transaction could move closer to completion.
California's Department of Justice said discussions over a possible settlement are confidential and declined to confirm whether negotiations were taking place or to comment on their reported terms. Paramount also declined to comment.
California Attorney General Rob Bonta is leading the coalition of 12 states that filed a lawsuit in July seeking to block the acquisition. The states argue that combining the two companies could reduce competition across parts of the film and television industries.
The U.S. Justice Department has already cleared the transaction, while the Federal Communications Commission has also approved a foreign-investment arrangement connected to the proposed merger. The states' lawsuit and a separate challenge from the Writers Guild of America remain legal obstacles to closing the deal.
Paramount CEO David Ellison has argued that combining the companies is important to the future of the business as traditional Hollywood markets face long-term pressure. The merger would also create a larger entertainment company intended to compete with major players such as Netflix and Disney.
The dispute has focused in part on how the combined company would operate its film and television businesses. Ellison has previously said the merged film studios would release 30 movies each year, while Bonta has said structural measures, such as selling parts of a company, can provide stronger protection for competition than commitments to follow particular business practices.
The proposed merger also faces concerns from the Writers Guild of America, which has sued separately. The guild argues that the transaction could affect writers' pay and working conditions, although it was not immediately clear whether it was involved in the latest settlement discussions.
Paramount also faces a financial deadline tied to the transaction. Under its agreement with Warner Bros. shareholders, the company is required to pay a $7 million daily fee after September 30 until the deal closes, increasing the financial pressure to resolve the remaining legal challenges.
Criticism has also focused on the future of CNN. Some lawmakers and other critics have questioned how Ellison would oversee the Warner Bros. news network after Paramount's CBS News operation came under scrutiny over its coverage of President Donald Trump. The potential independent monitoring of CNN is among the terms reportedly being considered in the settlement talks.
