Paramount Skydance has completed its $111 billion merger with Warner Bros. Discovery, creating a combined entertainment company under the Skydance name. The merger brings together two of the largest movie studios, along with streaming services Paramount+ and HBO Max, CBS, CNN, and sports properties including CBS Sports and TNT Sports.
The deal faced legal challenges from California and 11 other states, which filed a lawsuit arguing that the combination would substantially reduce competition and violate antitrust laws. In July, US District Judge Araceli Martínez-Olguín in the Northern District of California ruled that the merger would likely harm competition.
However, the legal obstacles were cleared after California settled the lawsuit last month, with the other states accepting the compromise. According to the judge’s approval on September 30, the settlement “represents a reasonable factual and legal resolution of the dispute.” Martínez-Olguín noted that settlements typically involve compromise rather than full remediation of alleged violations.
The settlement addresses antitrust concerns about film distribution by “requiring certain minimum thresholds of investment and release of domestic films,” according to the judge’s ruling. It also addresses licensing complaints regarding basic cable channels through “requirements for continued, separate negotiations of distribution for the two entities’ basic cable holdings.”
Free speech and media advocacy groups had urged the judge to reject the settlement, contending it would give residents of the states that sued Paramount “virtually nothing.” However, Martínez-Olguín rejected these objections, writing that “objections based on ‘hopes and desires’ for the proposed consent decree to reach farther… do not rise to the level of legal violations upon which the Court can reject the parties’ negotiated resolution.”
The merger completed today, following a last-minute legal challenge that was rejected by Supreme Court Justice Elena Kagan. Skydance, which acquired Paramount in a separate deal last year, takes its name as the official name of the merged entity.
Key facts
- The $111 billion merger combines Paramount and Warner Bros. Discovery into a company called Skydance
- The new company operates streaming services Paramount+ and HBO Max, plus CBS, CNN, and sports properties CBS Sports and TNT Sports
- A lawsuit by California and 11 other states claimed the merger would reduce competition; a settlement was reached after a judge found the deal would likely harm competition
- The settlement requires minimum thresholds for domestic film investment and separate negotiations for basic cable channel distribution
- The merger completed after Supreme Court Justice Elena Kagan rejected a last-ditch legal challenge