California Attorney General Reaches Settlement With Paramount Skydance
The merger is free to continue
Earlier this year, we covered the lawsuit that 12 U.S. states brought against Paramount Skydance in light of its attempted merger with Warner Bros. Discovery. The lawsuit brought the entire merger into question, and many wondered if this would finally be the end of the line for Paramount and its ambitious CEO.
On Monday, we received an answer. The 12-state coalition, led by California Attorney General Rob Bonta, has agreed to settle the matter and allow the merger to continue. However, Bonta and his fellow Attorneys General were able to demand some stipulations to protect movie theaters and hopefully reduce Paramount’s growing monopoly.
Warner Bros. Discovery CEO David Zaslav has already announced that the merger will close by early October. (There’s a reason for that. As we reported earlier, Paramount has to pay $650 million if the deal doesn’t close by October.)
It doesn’t seem like there are very many hurdles left for Paramount Skydance. But how will the merger — and the new stipulations — impact you, the consumer?
Let’s go over each of the biggest points from the new settlement.
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More movies in theaters for longer
One of the lawsuit’s chief concerns was that a combined Paramount/Warner Bros. company would produce fewer films than each company would separately. This could be pretty devastating to movie theaters.
To prevent this, the new settlement will make sure that the new Paramount/Warner Bros. corporate entity releases at least 30 new films per year for the next five years. And what’s more, at least 20 of those 30 must be “Wide Release Films,” which means each must show on at least 2,000 screens.
Don’t expect many films to get dumped directly to streaming, either. In order for a film to count towards the “Annual Film Release Commitment,” it has to stay in theaters for at least 45 days. It can’t become available to rent or buy for at least 30 days, and it can’t go to a streaming service for at least 90 days.
Pluto TV is here to stay, but other services are up for grabs
Good news for all of you Plutonians.
Under the new agreement, Paramount has to keep its FAST (free, ad-supported streaming) service Pluto TV operational for the next five years. It can’t bundle it into something else, or make it go away entirely. Unfortunately, there aren’t any promises for any of the other services owned by Paramount Skydance and Warner Bros. Discovery.
Paramount agrees to invest in the industry’s future
Mergers are never good news for workforces; they create redundancies, which leads to layoffs. And Hollywood unions have done a lot of work over the past few years to negotiate more rights in an age of uncertainty.
So one of the main provisions of the new settlement is a promise to invest back into the entertainment industry. Paramount can’t sell or close any of its production lots, and it can’t ignore any union agreements that either company made before they merged.
As for layoffs, if an employee is let go as a result of the merger, they’ll get to apply for another position within the same company. An application isn’t a promise of another job, but it’s better than nothing.
The newly merged company also has to promise to purchase $5 million in independent films per year and spend $9.5 million on career development programs.
A news ethics board is formed
The merger would put one company in charge of both CNN and CBS, which has led to a lot of pushback from the public. Paramount’s CEO, David Ellison, would have control over a large swath of the American news media, giving him unprecedented political influence.
The settlement’s proposed solution is the creation of a news editorial independence board. The new board will consist of five journalists, with no more than two journalists holding an affiliation with the same political party. (So for example, it could have two Republicans, two Democrats, and one Independent.) Board members will each hold their position for a term of three years.
According to the settlement’s proposed Consent Decree, this new board will establish “a set of guiding editorial principles based on CBS News and CNN’s Standards & Practices policies and principles.” They will also resolve employee disputes “regarding alleged reporting bias” and monitor “adherence to ethical journalism.”
This is clearly a compromise — the editorial board is a step in the right direction, but the Attorneys General were hoping that Paramount would relinquish control of CNN entirely. According to CNN, Connecticut Attorney General William Tong “wanted and demanded a full divestiture of CNN and CBS News,” and is “deeply disappointed that we could not do more.”
In this article
Paramount+ is Paramount Skydance’s flagship streaming service, and already merged with SHOWTIME a couple of years ago.
HBO Max is Warner Bros.’s flagship streaming service, and is expected to combine with Paramount+ after the merger.
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