Paramount and Warner Bros. Discovery reach settlement on proposed merger
Bend, Ore. (KTVZ) --- Oregon Attorney General Dan Rayfield announced a settlement today resolving a lawsuit challenging the merger between Paramount Skydance Corporation and Warner Bros. Discovery.
The agreement includes a five-year commitment to boost film production, a minimum $1.5 billion investment in domestic production and a $47.5 million workforce fund for displaced employees.
The lawsuit, originally filed in July by Oregon and a coalition of 12 state attorneys general, sought to maintain competition and protect film industry jobs.
Under the terms of the settlement, Paramount must also negotiate basic cable channels separately for five years, establish a board for news independence at CNN and CBS and submit to compliance oversight by an independent monitor.
Oregon Rayfield led the state's participation in challenging the transaction. “We stepped up to challenge this merger to limit rising costs for working families, to preserve competition and to protect Oregon's film production industry,” Rayfield said. “Today's agreement keeps real competition in place, ensures that productions will continue and ensures journalistic independence. That's a win for Oregon workers and consumers.”
Attorneys general from 11 other states joined Oregon in securing the settlement, including California, Ariz., Colo., Conn., Mass., Minn., Nev., N.J., N.M., N.Y. and Washington.
The agreement outlines a five-year requirement for film releases. Paramount agreed to release 30 films annually, including 20 wide releases, during the first two years. In years three through five, the company must release 32 films per year, including 21 wide releases. The settlement mandates at least four independent film releases each year. If Paramount fails to meet the film output requirements, the company must divest Miramax Studios and pay $30 million per missed film toward health care and retirement trust funds for labor unions, the Motion Picture & Television Fund and the National Association of Attorneys General for antitrust enforcement.
Under the domestic production terms, Paramount must spend at least $1.5 billion over five years above its 2025 U.S. spending levels, expanding from its current baseline where approximately 5% of production occurs in the U.S. If a federal film tax credit of at least 20% is enacted, domestic production must rise to 20% in years one and two and at least 30% in remaining years. If California or New York enacts an expansive state film tax credit, U.S. production must increase to at least 40% of all film production.
The settlement also addresses television, streaming and news distribution. For five years, the company must negotiate Paramount's basic cable channels separately from Warner Bros.' basic cable channels. The merged company must maintain its free streaming service, Pluto TV, at current service levels and establish a News Editorial Independence Board to protect editorial independence at CNN and CBS. Additionally, the company will establish a $25 million fund, contributing $5 million annually over five years, to acquire independent films.
The $47.5 million Workforce Fund will support career development and training for employees displaced by the merger over a five-year period. The company is required to honor existing collective bargaining agreements and bargain in good faith with unions going forward. Compliance with all terms of the agreement will be overseen by an appointed independent monitor.
The settlement remains pending court approval.
