Paramount Near Weekend Settlement Over $110B Warner Bid

Paramount and 12 states could settle this weekend, with CNN monitoring and theatrical release pledges on the table for its $110 billion Warner Bros. deal.

Paramount and the states seeking to block its $110 billion acquisition of Warner Bros. could settle as soon as this weekend, according to sources familiar with the matter who spoke to Reuters on Friday. Among the terms under discussion are independent content monitoring of CNN and a commitment on the number of theatrical releases. The case, brought by California and 11 other states, is one of the final hurdles to Paramount's bid to become a major rival of Netflix and Disney. A spokesperson for the California Department of Justice said potential settlement talks are confidential, stating, "We cannot confirm or deny whether settlement talks are occurring or their alleged substance," while Paramount declined to comment.

The report of an imminent settlement triggered an immediate market reaction: Paramount's shares rose nearly 7% after markets closed, and Warner Bros. Discovery shares were up 8.4% in after-market trading, as reported by Reuters. The surge reflects how much both companies' fortunes are tied to the deal's outcome. A settlement this week could help Paramount avoid paying millions of dollars in fees to Warner Bros. shareholders. Paramount is on the hook for a $7 million a day "ticking fee" to Warner Bros. shareholders each day after September 30 until the deal closes — a sweetener meant to signal confidence to Warner investors that a fast agreement would directly cut off.

Paramount CEO David Ellison has staked his company's future on consolidating two of Hollywood's biggest studios as the industry wrestles with decades-long market erosion. The combination would unite a raft of valuable media properties, including CNN, HBO, "Harry Potter," "The Daily Show," and rights to NFL football games, per the Economic Times. Trump administration regulators cleared the deal, but the states sued in July, arguing the combined company would create a media behemoth with the power to raise prices in movies and television. The Writers Guild of America has also sued, arguing the transaction would decrease pay and worsen working conditions for writers.

The timing is the twist: the Trump administration's regulators had already cleared the deal, yet the state-level challenge proved to be the true last obstacle — and a settlement appears to be arriving at the eleventh hour, just before the $7 million daily ticking fee starts accruing on September 30. The terms on the table are also unusual. Independent content monitoring of CNN would place outside scrutiny on one of the most closely watched newsrooms in America, a remedy born of lawmakers' criticism of Ellison for tailoring news coverage at Paramount-owned CBS News to favor President Donald Trump, per Reuters.

If a deal lands this weekend, Paramount would clear its final major hurdle toward closing the acquisition and building its Netflix-and-Disney rival. But questions remain. A WGA spokesperson did not immediately respond to a request for comment on whether the union is part of the talks with Paramount and the states. California Attorney General Rob Bonta has said structural remedies, which include selling off parts of a business, are more effective at protecting competition than companies promising specific actions — suggesting the state may prefer divestitures over behavioral pledges. Ellison has previously vowed the combined film studios would release 30 movies a year, a figure that aligns with the theatrical release commitment under discussion.