Paramount Settlement Terms Laid Out By CA AG Rob Bonta, Who Says Deal Is “Not A Blessing” Of WBD Merger

California Attorney General Rob Bonta has revealed terms of a settlement with Paramount allowing it to acquired Warner Bros. Discovery, but stressed that the agreement is “not a blessing” of the mega-merger. Speaking at a news conference Monday, Bonta detailed a list of items to which Paramount is committed. The list ranges from stepped-up film production in the U.S., an editorial oversight board for CNN and CBS News, commitments to theatrical releases and more. Not on the list, surprisingly, were any structural remedies. Repeatedly, Bonta has emphasized that only structural, not behavioral, remedies would be deemed acceptable by the AGs. California and 11 other states sued in July to block the deal on antitrust grounds, as did the Writers Guild of America. The agreement announced Monday addresses both suits and removes the final hurdle for Paramount as it looks to close the $111 billion transaction, which will transform Hollywood and join together two century-old studio operations. Watch on Deadline “This settlement is not a vote of support for this merger,” Bonta said. “It is not a blessing for the broader merger … which doesn’t serve the economy or consumers well.” Later, the official added more bluntly, “I don’t think these companies should merge.” Outweighing that sentiment, he added, was the conviction that he works for the people of California and had an obligation to help their situation. “I’d rather resolve the case in the boardroom rather than the courtroom, and that’s what happened here,” he said. The combined company, which currently produces just 5% of its films in the U.S., has made a $1.5 billion commitment over five years to raise the level to 20%. In keeping with longstanding promises by Paramount CEO David Ellison, the company will agree to produce 30 theatrical releases in the first two of the five-year consent decree, with that number rising to 32 films in each of the next three years. Bonta called the arrangement “the opposite of Disney-Fox,” and a framework that “locks in a massive upside.” Since the Disney-Fox deal closed in 2018, as many Paramount-WBD deal opponents have noted, the film output and workforce at 20th Century Studios has declined markedly. At least four of the films must be independent films and 20% must be blockbusters. (Bonta did not offer definitions of those terms.) Paramount must also establish indie film fund and pay $9.5M annually for workforce training It also will establish a news editorial independence board “to assure independent fact-based reporting” at CNN, Bonta said. While the settlement provides some influx of funding and support for the entertainment industry in California, while also preventing Paramount from making good on threats to leave the state, the impact on jobs remains unclear. The company has promised to deliver $6 billion in cost savings from the merger, which is likely to entail significant layoffs. Bonta’s comments represent only the states’ part of the story. Despite the specifics offered up by the attorney general, there are many details to be filled in on the corporate side of the deal given that the same company will control two studios, two large-scale news operations and two general entertainment streaming services. It is expected that the deal will formally close within the next couple of days, especially given that Paramount will owe a $7-million-a-day “ticking fee” starting October 1.