California officials have reached an agreement ending their legal challenge to Paramount’s proposed $81 billion takeover of Warner Bros., prompting an angry reaction from Hollywood figures who described the settlement as a major victory for President Donald Trump.
Attorney General Rob Bonta, who joined forces with 11 other state attorneys general to oppose the deal, and the Writers Guild of America agreed to settle their cases Monday. The decision removes a significant obstacle to the blockbuster Paramount-Warner Bros. merger, although the transaction still requires court approval.
The settlement immediately intensified debate across Hollywood. Mark Ruffalo, the Marvel actor and outspoken political activist, criticized California Governor Gavin Newsom on X after state officials announced the agreement.
“Gavin Newsom hands huge win to Trump and his billionaire cronies,” Ruffalo wrote while responding to comments from Alvaro Bedoya, a senior adviser at the American Economic Liberties Project and former Federal Trade Commission commissioner.
Bedoya also condemned the settlement, arguing that powerful billionaires had “bribed, censored, and bullied their way to the top.” He warned that the merger could bring job losses in Los Angeles and Atlanta, reduce contracts for small businesses and push up the cost of cable services and movie tickets.
The proposed Paramount-Warner Bros. combination has been politically contentious from the outset, in part because of the reported relationship between President Trump and the family of Paramount CEO David Ellison.
Before the settlement was announced, Ruffalo had urged Bonta to continue fighting the merger rather than resolve the lawsuit.
“Don’t you dare … do not cave,” Ruffalo wrote previously. He said 5,670 filmmakers had put their names behind the legal challenge, while more than 75,000 others had signed a petition urging officials not to accept a settlement within a three-week period.
The actor argued that California residents would suffer if what he called a deal built on “empty promises” were allowed to proceed.
California Attorney General Rob Bonta, pictured above, and 11 other state attorneys general have settled their lawsuit seeking to stop Paramount’s $81 billion merger with Warner Bros. Discovery
Marvel actor Mark Ruffalo criticized Governor Gavin Newsom, calling the settlement a “huge win” for President Donald Trump amid the reported ties between Trump and David Ellison’s family
David Ellison, pictured, welcomed Monday’s agreements with the states and the Writers Guild of America, saying they provide “complete clearance” for the Warner merger and will help create a “stronger Hollywood”
The merger would unite major news operations, including CNN, which the Republican administration barred from the White House after Trump accused the network of unfavorable coverage.
Newsom defended the agreement, presenting it as a measure that would benefit workers and support California’s creative industries.
“It protects California jobs while putting a safeguard in place to help preserve editorial independence for two of America’s most important news organizations,” the governor said.
Under the terms announced Monday, Paramount has pledged to expand film production in the United States, contribute millions of dollars to a fund for employees displaced by the merger and establish additional oversight of editorial independence within its news businesses.
The settlement cannot take effect until a judge grants final approval.
Ellison welcomed the agreements with the state attorneys general and the Writers Guild, describing them as “complete clearance” for the Paramount-Warner Bros. deal. He again said the merger would help “build a stronger Hollywood.”
Opponents dismissed the concessions as inadequate and accused state officials of yielding to corporate pressure. For many critics, the lawsuits represented the final major barrier preventing Paramount and Warner Bros. from joining forces.
Negotiations remained heated for months. Even after the companies announced additional safeguards Monday, Bonta and the other prosecutors who brought the case said they continued to believe the merger should not go ahead.
Key news networks would be brought together including CNN, which the Republican administration barred from the White House over what Trump called unfavorable coverage
Talks were contentious for months – and, despite new remedies announced Monday, Bonta and other state prosecutors who sued said that they still didn’t think the companies should merge
The coalition of states – which, beyond California, also includes entertainment heavyweight New York – sued to block the merger in July, alleging it would ‘extinguish competition’ and lead to fewer choices for consumers, particularly movie theatergoers and cable customers.
In Monday’s agreement, the states said they had secured a handful of ‘court enforceable’ commitments from Paramount – including pledges to increase domestic film production over the next five years by spending at least an additional $1.5 billion, or $300 million per year, and commit another $47.5 million to help fund training and career development for workers displaced by the merger.
Paramount also must make good on its promise to release 30 films each year for the next two years and 32 films in each of the three years after that.
If it fails to do so, the states say it will be required to divest from Miramax Studios and pay $30 million for each missed film toward health care and retirement trust funds associated with the Writers Guild of America and other industry unions.
When it comes to cable, Monday’s settlement orders the company to negotiate deals for current Paramount-owned and Warner-owned basic channels separately for the next five years, which the states say will help keep consumer prices down.
The company must also form a ‘News Editorial Independence Board’ monitoring news operations at CBS and CNN.
Bonta said in a news conference in Los Angeles the settlement was about ‘protecting people’s careers, the lives they’ve built here in California, the livelihoods their families rely on,’ while maintaining it was not a vote for the merger.
The Writers Guild of America, which filed its own lawsuit in July challenging the merger on the grounds it specifically harms Hollywood writers, separately confirmed that it also settled its case – concluding that it couldn’t continue its legal fight alone.
Bonta said in a news conference in Los Angeles the settlement was about ‘protecting people’s careers, the lives they’ve built here in California, the livelihoods their families rely on,’ while maintaining it was not a vote for the merger
Critics, however, decried the settlement terms as too weak and accused the state attorneys general of capitulating to corporate pressure. Many saw the litigation as the last guardrail from keeping a combined Paramount-Warner from becoming a reality
‘We continue to believe the merger will cause damage to writers and the industry at large,’ the WGA said in a statement. The union maintained that as a nonprofit ‘with no backing from government enforcers,’ the complex litigation would have cost millions of dollars.
New York Attorney General Letitia James, who helped secure Paramount’s commitment to put $17.5 million in the Writers Guild health care fund, said she will monitor the company’s activities ‘to ensure they are following this agreement and the law.’
The settlement comes after mounting fears that the iconic movie studio would move out if the lawsuit could not reach an agreement – costing thousands of jobs and serving the state a huge economic blow.
Paramount previously agreed to delay its transaction well into next year so the challenges could make their way through court. But it soon called for a settlement – notably as it looked increasingly likely that the price tag for Warner could get a lot more expensive.
Paramount had promised to pay shareholders ‘ticking’ fee compensation amounting to $7 million each day the deal was not closed past Sept. 30.
Including billions of dollars in debt, Paramount’s buyout of Warner is currently valued at about $111 billion based on outstanding shares.
Over the weekend, a handful of lawmakers, including Democratic Senators Elizabeth Warren and Cory Booker, urged the states to keep up their fight.
Other critics decried the deal Monday while warning what further consolidation could mean in an industry controlled by just a few major players.
Paramount previously agreed to delay its transaction well into next year so the challenges could make their way through court. But it soon called for a settlement – notably as it looked increasingly likely that the price tag for Warner could get a lot more expensive
The settlement comes after mounting fears that the iconic movie studio would move out if the lawsuit could not reach an agreement – costing thousands of jobs and serving the state a huge economic blow
Connecticut Attorney General William Tong, whose state was among those filing suit, said his main goal had been to protect the editorial independence of CNN and CBS News and that he wanted to see a full divestiture of the two news organizations
In a statement Monday, Ellison said that the newly combined company would be based in Los Angeles.
‘We aren’t going anywhere. Our history is here and this is where our future is being built,’ he said.
Paramount never publicly commented on a potential move from California, and Monday’s settlement doesn’t specify that its headquarters stay in the state. But over the summer, Tennessee officials wrote Ellison a letter encouraging Paramount to relocate there.
Connecticut Attorney General William Tong, whose state was among those filing suit, said his main goal had been to protect the editorial independence of CNN and CBS News and that he wanted to see a full divestiture of the two news organizations.
A week ago, Tong said, Paramount refused to agree to any editorial independence for the news outlets.
‘We wanted to save ethical and independent journalism and news,’ he said in a statement.
Tong and others stressed that it was an uphill battle after the Trump administration decided against intervening. In June, the US Justice Department released a lengthy statement supporting the merger.
‘The complete abdication of the federal government’s enforcement role in this fight left states with one arm tied behind our backs,’ Tong said.
Our News Outlet reached out to Governor Newsom’s Office, Paramount, Warner Bros, The Writers Guild of America, State Attorney General Rob Bonta and Mark Ruffalo’s management team for comment.
