According to The Wall Street Journal on Sept. 30 local time, a federal court approved a settlement between the two sides in the antitrust lawsuit filed against Paramount by the attorneys general of 12 states, led by California. The European Union granted conditional approval of the merger in July, leaving the U.S. federal ruling as the final gate for the deal. Paramount said it now expects the transaction to be completed on Oct. 6.
The merger of two of Hollywood's oldest studios hands Paramount a sprawling entertainment empire spanning blockbuster franchises such as Harry Potter, the DC superhero series and Game of Thrones, as well as cable channels including CNN and Cartoon Network.
"At least 30 films a year for five years": the conditions
The 12 states, led by California, and the Writers Guild of America filed the antitrust suit against Paramount in July. The attorneys general argued the combination of Paramount and Warner would create a monopoly in theatrical film and TV channel markets, while the WGA warned that a merger of two major players would reduce jobs for screenwriters.
Reflecting those concerns, Paramount agreed to invest at least an additional $1.5 billion in U.S. content production over five years, release at least 30 films a year and fund workforce development programs for the entertainment industry. If it fails to meet the production target, Paramount must sell its stake in Miramax, a core film unit, and pay $30 million (about 40.8 billion won) for each film short of the quota.
Warner and Paramount must also negotiate separately with cable operators over channel distribution. The condition reflects concern that the combined company could use popular channels such as CNN, MTV and HBO to force bundled deals on cable operators. If the two do not conduct distribution talks separately, they must divest some cable channel subsidiaries.
Within 180 days of closing, the companies will establish a five-member editorial board composed of journalists. The board will have authority to mediate disputes among CBS News and CNN staff over breaches of editorial principles, bias in coverage and fairness. The provision addresses concerns about concentrated influence over public opinion as CNN and CBS come under one roof. Suspicions have been raised that the Ellison family could intervene in coverage involving the Trump administration, particularly because Paramount Chief Executive David Ellison is the son of Oracle founder Larry Ellison, a billionaire and close ally of U.S. President Donald Trump.
Mattel CEO behind 'Barbie' named co-chief of merged company
Ynon Kreiz, chief executive of toymaker Mattel, has been named co-CEO of the combined Paramount-Warner entity. Kreiz is a veteran of the media and entertainment industry, with stints at television production companies and gaming firms. He later moved to Mattel, where he is credited with transforming the toy manufacturer into an entertainment company spanning film, television and games.
Since taking the helm at Mattel in 2018, he has overseen restructuring at a large company, shrinking production sites and cutting more than 2,000 jobs. The merger leaves Paramount with about $80 billion in debt. The company has told investors it expects to realize annual synergies of $6 billion within three years of the merger. Kreiz is expected to pursue restructuring to hit those targets.
Casey Bloys, content chief of Warner's HBO and HBO Max, is expected to lead the combined company's streaming business.
