Paramount settles with states over $81B Warner buyout

Paramount reached a settlement on Monday with a coalition of state attorneys general that sued to challenge the company's buyout of Warner Bros. Discovery. The move effectively clears the path for the merger to move forward, according to a person familiar with the matter who spoke to the AP.

The coalition of states, which includes California and New York, sued in July to block the $81 billion transaction. The states argued that the combination would extinguish competition and reduce choices for movie theatergoers and cable customers across the United States. A separate complaint was also filed by the Writers Guild of America, and the legal challenge was scheduled for an antitrust trial in March.

Paramount maintained that the claims were meritless. It had previously agreed to delay the closing well into next year while the lawsuit advanced, but later pushed for a settlement after securing regulatory approvals worldwide, including from the US Department of Justice. The company viewed the state action as its final obstacle.

Critics spoke out against the settlement on Monday, warning against further media consolidation. Alvaro Bedoya, senior adviser at the American Economic Liberties Project and former FTC commissioner, warned in a statement that the merger would trigger layoffs from Los Angeles to Atlanta, harm small business contracts, and raise prices for cable packages and movie tickets.