(AFP) – Paramount has reached a settlement with a group of US states that clears the way for its takeover of Warner Bros. Discovery, US media reported Monday, creating a Hollywood empire spanning television, news, and cinema. Paramount, which is run by David Ellison, whose ultra-wealthy family has ties to US President Donald Trump, won a bidding war in February for control of a stable of assets, including Warner Bros. Pictures, CNN, and the HBO Max streaming service.
The Trump administration approved the deal, one of the largest media mergers in years, in June without demanding a change to its business, before 12 US states sued to block the transaction. Paramount beat out Netflix in a high-stakes bidding war to acquire Warner Bros., with financing that reportedly includes about $24 billion in equity from sovereign wealth funds of Saudi Arabia, Qatar, and Abu Dhabi. David Ellison’s father, billionaire Oracle-founder Larry Ellison, provided funding and a crucial guarantee for the deal.
Opponents in the movie industry said the combined company would slash jobs in a Hollywood already under pressure and reduce the number of films produced every year, while news media groups feared CNN’s independence could be compromised. The news comes just days after Trump banned CNN, Politico, and MS NOW from the White House. The outlets are suing the administration to have the decision reversed.
Paramount had threatened to move out of California if the state’s attorney general, Rob Bonta, did not negotiate an end to the lawsuit. In their complaint, the 12 states claim the combined company would control roughly 27 percent of wide-release theatrical film distribution and a similar percentage of basic cable channel licensing. California led the suit, joined by Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington, all Democratic-led.
The European Union gave the merger the green light after winning certain concessions from Paramount. Lawyers for the states worked through the night on the settlement, Bloomberg reported, citing a person familiar with the matter. Four states—Massachusetts, New York, Connecticut, and Minnesota—had held out but concluded that fighting on without California was not worth the expense, the Bloomberg report added. Those states did win independent editorial boards for CBS News and CNN, and the terms are said to include a financial penalty if Paramount fails to release 30 films a year in theaters, according to Bloomberg.
Paramount and the offices of the California and New York attorneys general did not immediately respond to requests for comment. A formal announcement of the deal is expected later on Monday.
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