Paramount and WBD move to merge. Paramount, WBD, ADWEEK Illustration By Mark Mwachiro --> CNN and CBS News are one step closer to being under the same roof after Paramount Skydance agreed to settle a lawsuit brought by state attorneys general from 12 states, including California and New York, that delayed its acquisition of Warner Bros. Discovery.
According to various reports , the deal between the media conglomerate and the attorneys was announced on Monday and may include no sale of its cable networks and an independent board to ensure no editorial interference at CNN or CBS News.
Following the settlement news, Paramount Skydance CEO David Ellison reportedly told staffers he expects the merger to close in about two weeks.
Rob Bonta, California’s attorney general, who led the charge opposing the $110 billion merger, said in July that the new combined company’s ownership of CNN and CBS News would create “fewer opportunities for Americans to hear the full breadth of information and opinions on a subject, and then come to their own conclusions.”
However, the lawsuit he and the other state attorneys general brought focused on the merger of two movie studios, which could lead to job losses in California, higher prices, and less film and TV content, potentially harming movie theaters, basic cable distributors, and consumers.
With the settlement announcement, Ross Benes, a senior analyst at Emarketer, said that “California did not have as much leverage as it portrayed.”
“The threat of political backlash over job losses outweighed the need to push back against corporate consolidation or protect consumer interests,” Benes said, adding that Paramount Skydance’s steamrolling of legal obstacles shows that regulations governing mass media ownership have essentially ceased to exist in the U.S.
The streaming industry will also be affected once the merger finalizes, as Paramount Skydance will house both Paramount+, with nearly 82 million subscribers, and WBD’s HBO Max, with over 140 million subscribers globally. Executives have said the two services will merge into one, giving it the muscle to compete with Netflix and Disney+. Incoming leadership have assured that HBO will continue to retain creative independence as a sub-brand within this new universe.
“This settlement materially changes the trajectory of the streaming wars heading into 2027,” said Mike Proulx, Forrester’s vp research director. “A combined Paramount and HBO Max has the kind of heft to take on the likes of Netflix, pairing two major studios with what will become one of the industry’s largest content libraries under a single roof.”
The urgency to settle the lawsuit stems from the fact that the two sides were headed toward an antitrust trial set for March 2027, which also included a complaint filed by the Writers Guild of America opposing the mega merger. In addition, if the deal wasn’t completed by Sept. 30, Paramount Skydance would have to pay shareholders a 25-cent-per-share “ticking fee,” which reportedly comes out to $650 million per quarter.
Meanwhile, CNN CEO Mark Thompson has tried to reassure staffers during this uncertain period, saying in one of the company’s most recent global town halls that they should execute their strategy “with confidence and gusto” and not get too consumed by the unknown.
Mark Mwachiro is a TVNewser contributor who has been writing for the blog since March 2022. Based out of New York, Mark has also contributed t…