Case Description
In July 2026, twelve states brough suit to block the Paramount Skydance’s proposed acquisition of Warner Brothers Discovery. The complaint alleges that the proposed transaction would harm competition in the markets in the United States for the (1) distribution of wide-release theatrical films; distribution of anticipated top-grossing theatrical films; and (3) licensing of basic cable channels to distributors. The complaint states that the merger is presumptively anticompetitive in the each of these three markets based on the combined market share of the parties when calculating market concentration using the Herfindahl-Hirschman Index. The plaintiff states allege that the proposed transaction violates Section 7 of the Clayton Act.
The plaintiff states sought a temporary restraining order to prevent the deal from moving forward, and the court granted the states’ motion on July 20, 2026.
On September 30, 2026, the court approved the proposed settlement between the plaintiff states and defendants. The Consent Decree requires that the combined Paramount-Warner Brothers entity produce 30 films a year for each of the first two years after the transaction closes, and then 32 films a year for the next three years. If the combined entity fails to meet its film release commitments, it will be required to divest Miramax Studios. Additionally, for each film that the combined entity falls below the required release requirement, the entity must contribute $30 million split between the health care and retirement trust funds of unions that work on the production of films, the Motion Pictures & Television Fund, and a fund for antitrust enforcement. The combined entity also agrees to negotiate separately for the Paramount and Warner Brothers basic cable channels separately for five years after the closing of the transaction. Additional terms include establishment of a News Editorial Independence Board; maintaining the Pluto TV or equivalent service; and paying reasonable attorneys’ fees and expert fees up to $40 million.