California Attorney General Rob Bonta and Paramount Skydance chief David Ellison have reached an agreement to settle an antitrust dispute that remains a major obstacle to the company's acquisition of Warner Bros.'s latest holding. Discovery (WBD) for $111 billion, reports the Los Angeles Times (LAT), citing a source familiar with the situation. As part of the agreement, Paramount committed to releasing 30 films annually and spending $1.5 billion on film production in Hollywood over the next five years. If these conditions are not met, the company will have to pay a fine.
The agreement has not yet been officially announced. The agreement still must be approved by a federal judge.
If the deal is not completed by June 4, 2027, Paramount will have to pay Warner Bros. Discovery $7 billion in compensation for failed takeover. In addition, the company has already paid $2.8 billion to cover compensation owed to Netflix after the streaming service pulled out of the battle for WBD in February.
At the same time, Ellison, as the Los Angeles Times writes, is interested in completing the takeover of Warner by the end of September. On October 1, Paramount must begin paying WBD shareholders 25 cents per share for each quarter of delay. That would add about $7 million per day to the deal, the Los Angeles Times estimated. Ellison also wants to close the deal before the midterm elections to the US Congress.
Let us remember that in December 2025, WBD announced an agreement to sell the company to Netflix, but Paramount, led by Ellison, decided to interrupt the offer. Netflix later refused to increase the cost of acquiring the company, noting the “inexpediency” of such a deal, and withdrew from the fight, after which the road to purchasing WBD opened for Paramount.
The sale of WBD caused heated controversy both between claimants for the assets and in the socio-political environment in the United States. The sale of WBD sparked intense controversy in both Hollywood and American politics. US President Donald Trump openly supported the company's transition to the control of Ellison, the son of his ally, billionaire and Oracle founder Larry Ellison, and has repeatedly criticized the editorial policies of CNN, part of WBD.
In addition to CNN, WBD owns TLC, Cartoon Network, Discovery Channel and others. The company was founded by the Warner brothers in 1923 and owns more than 12,000 films and 2,000 TV series. Among the most famous are “Harry Potter”, “Game of Thrones”, “Dune”, “The Matrix” and “The Lord of the Rings”. The series “The Sopranos,” “True Detective,” “Euphoria” and “The Last of Us,” which aired on HBO, are also part of the holding’s assets.
The deal with Paramount was approved by WBD shareholders in April, and in June by the US Department of Justice, which did not find any signs of a monopoly in the potential merger. However, Bonta, along with the attorneys general of 11 other states, went to federal court in an attempt to block the merger. The lawsuit argued that combining the two media companies could lead to less competition, higher prices, lower wages and job losses. Prosecutors estimate that the combined company would have nearly 30% of the U.S. cable TV market and a significant share of the general film distribution market.
In recent weeks, Bonta has come under simultaneous pressure from both opponents and supporters of the settlement. California Governor Gavin Newsom, Los Angeles Mayor Karen Bass and Democratic gubernatorial candidate Xavier Becerra called on the Attorney General to reach an agreement with Paramount rather than bring the dispute to trial. One of the arguments was Paramount's threat to move its operations from California to another state.
At the same time, disagreements also arose within the coalition of attorneys general. According to the Los Angeles Times, New York Attorney General Letitia James and Connecticut Attorney General William Tong previously expressed dissatisfaction with the negotiated settlement terms, considering them insufficient to limit the influence of the combined Paramount-Warner Bros.
The New York Post, citing sources, reported that James was involved in settlement negotiations. New York is especially interested in the terms of the deal, since Paramount and Warner Bros. thousands of state residents work.
The takeover will be carried out using significant borrowed funds. Paramount's bankers raised nearly $80 billion in debt financing. Larry Ellison has agreed to guarantee $47 billion in equity capital required to complete the transaction. Sovereign funds and related structures of Saudi Arabia, Qatar and Abu Dhabi intend to invest at least $24 billion in the combined company.
Last week, the US Federal Communications Commission (FCC) approved Paramount's application, allowing foreign investors to indirectly own nearly 50% of the combined company's capital. At the same time, the Ellison family will retain control over voting shares, and foreign investors, according to the conditions presented by the FCC, will not have the opportunity to influence editorial decisions or management of the company.
