Davenport announces settlement in Paramount-Warner Bros. merger lawsuit

New Jersey Attorney General Jennifer Davenport announced a settlement Monday with Paramount Skydance Corporation stemming from a multistate lawsuit challenging the company’s merger with Warner Bros. Discovery.

Davenport joined a coalition of 12 attorneys general in suing Paramount in July, arguing that the proposed merger would reduce competition in the entertainment industry and could lead to higher prices, reduced film production, and less variety in content.

The complaint alleged that Paramount and Warner Bros. together would control about 27% of the market for wide-release theatrical film distribution.

The settlement, which still requires court approval, includes a five-year commitment to maintain specified levels of film production, at least $1.5 billion in additional domestic film production spending, a $47.5 million fund for workers affected by the merger, and restrictions on how Paramount handles negotiations involving its cable networks.

“This settlement includes key concessions designed to protect consumers from hikes to cable fees and workers and local businesses from cuts to film and TV production,” Davenport said. “We have been laser-focused on the interests of New Jersey’s working families throughout, and the agreement our multistate coalition obtained here reflects that. We look forward to generations more of films and TV shows produced right here in the birthplace of the motion picture industry.”

The coalition’s lawsuit came as New Jersey has sought to expand its film and television production industry.

Under the settlement, Paramount must release at least 30 films annually during the first two years of the agreement, including at least 20 wide releases. In years three through five, the company must release at least 32 films annually, including at least 21 wide releases.

Paramount must release at least four independent films each year.

If Paramount fails to meet the annual film-release requirements, it would be required to divest Miramax Studios and pay $30 million for each film below the required threshold. The payments would go toward health care and retirement trust funds associated with several entertainment unions, the Motion Picture & Television Fund, and the National Association of Attorneys General for antitrust enforcement.

The agreement also requires Paramount to spend at least $1.5 billion more on U.S. film production over five years than it did in 2025.

According to the attorney general’s office, about 5% of Paramount’s production currently takes place in the United States. The settlement calls for further increases in domestic production if certain federal or state film tax credits are enacted.

If a federal film tax credit of at least 20% is enacted, U.S. production would have to account for at least 20% of the company’s film production during the first two years and at least 30% during the remaining three years.

If California or New York also enacts a more expansive state film tax credit, at least 40% of the company’s film production would have to take place in the United States.

Paramount also agreed to continue existing development efforts, including planned investments in New Jersey.

The settlement would establish a fund to purchase independent films, with Paramount contributing $25 million over five years.

The company would also establish a $47.5 million workforce fund over five years for training and career development for workers displaced by the merger. Paramount would be required to honor existing collective bargaining agreements and bargain in good faith with unions in the future.

The settlement also restricts Paramount’s cable negotiations for five years. The company would be required to negotiate separately for Paramount’s basic cable channels and Warner Bros.’ basic cable channels, preventing the merged company from negotiating for the two companies’ channels as a single package.

Paramount would also be required to continue offering a free streaming service, such as Pluto TV, while maintaining its current level of service and quality.

The agreement additionally requires the company to establish an editorial-independence board for CNN and CBS.