Paramount Skydance has cleared a major legal hurdle to its US$110 billion acquisition of Warner Bros Discovery after reaching settlements with a group of US states and the Writers Guild of America.
The settlements pave the way for one of the largest media mergers in history, after 12 state attorneys general led by California sued in July to block the transaction on antitrust grounds.
Under the settlement with the states, Paramount agreed to increase US film production spending by at least US$300 million annually and meet theatrical release quotas for five years.
Paramount will produce 30 films in each of the first two years and 32 films annually in the following three years. At least four films each year must be independent productions and at least 20% must be blockbusters.
The company will also refrain from raising rates charged to cinema operators for three years.
Paramount further agreed to establish a news editorial independence board covering CBS and CNN.
The Writers Guild of America separately settled its case against Paramount, although it said it continued to believe the merger would harm the industry.
The states had argued that the merger would reduce competition and give the combined company greater power over the film and television industries.
Paramount and Warner Bros Discovery said earlier this year that the merger would generate US$6 billion in savings, including through cost reductions that could affect jobs across Hollywood as well as the CBS and CNN newsrooms.
The combined company is expected to carry US$80 billion in debt.
Paramount also avoids a US$7 million daily fee that would have been payable to Warner Bros shareholders for each day the transaction remained incomplete after Sept 30.
Antitrust regulators in the European Union and Britain have already cleared the deal.
Reuters
