Paramount one step closer to $110bn Warner Bros merger after settlement with 12 states

Paramount has reached a settlement with California and other states that sued over the media giant's $110bn (£82.2bn) with Warner Bros Discovery.

The agreement clears a major hurdle to the proposed deal - announced earlier this year after Paramount beat out a bid from Netflix.

A source familiar with the settlement told Reuters that the agreement includes independent editorial boards for the CNN ‌and CBS networks - as the merger would bring the rival news outlet under the same ownership.

The source also told the news agency that the settlement includes a $30m (£22.4m) penalty ⁠per film ​falling short of the ​30-movies-a-year release ​target that Paramount has promised.

While Trump administration regulators cleared the deal for Paramount to absorb Warner Bros. Discovery (WBD), a coalition of 12 state ⁠attorney generals sued in July to block the merger.

Led by California's attorney general, the lawyers argued that the merger - mainly aimed at creating a bigger rival to the likes of Netflix - would substantially weaken competition in the US market, driving up prices for consumers and costing jobs.

A settlement with the states will help Paramount avoid a $7m-a-day (£4.4m) "ticking fee" it owes WBD shareholders for each day the deal does not close past 30 September.

Concerns were raised that the deal would give US president Donald Trump more influence over CNN due to the possibility of Paramount head David Ellison and his father Larry, a longtime Trump associate, reorienting the network.

It comes after CNN, MS NOW and Politico said they have notified Donald Trump's administration that they are filing a lawsuit over being denied White House access over the weekend.

WBD's board first announced it was open to selling or partly selling the company in October 2025 after a summer of hushed speculation.

Back in June that year, WBD announced its plan to split into two companies: one for its TV, film studios, and HBO Max streaming services, and one for the Discovery element of the business, primarily comprising legacy TV channels that air cartoons, news, and sports.

More: Why was Warner Bros for sale?

After Netflix announced it had agreed a $72bn (£54bn) deal for WBD's film and TV studios on 5 December, Paramount launched a hostile bid - meaning straight to shareholders - with a $108.4bn (£81bn) bid several days later.

Paramount claimed to have tried several times to bid for WBD through its board, but said it launched the hostile bid after hearing of Netflix's offer because the board had "never engaged meaningfully".

Eventually, WBD accepted Paramount's offer of $110.9bn in February after Netflix withdrew.

One lawsuit against the merger - filed by the Writers Guild of America (WGA), also in California - remains pending.

The union's east and west sectors filed a joint antitrust suit in July, arguing the joint entity "would have both the incentive and the ability to lower costs by suppressing writers' wages and reducing output".

"Writers will be paid less and have fewer employment opportunities", the WGA added.

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UK Culture Secretary Lisa Nandy also said in June she was "minded" to intervene in the merger over public interest concerns, but later said in August she would not due to the legally binding commitments provided to her by Paramount.

Paramount, WBD, the WGA and the Department of Justice have not commented publicly on the reports of a settlement.

(c) Sky News 2026: Paramount one step closer to $110bn Warner Bros merger after settlement with 12 states