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Paramount has reached a settlement to merge with Warner Bros.
AP Photo/Chris Pizzello
Paramount closed a deal with California AG Rob Bonta and 11 other states on Monday morning to settle a bruising lawsuit to block the studio’s acquisition of Warner Bros.
A 45-minute press conference was held by Bonta today to unveil the news. (Bonta also revealed that the WGA has also separately settled its suit against Paramount trying to block the merger.)
The settlement includes a pledge by David Ellison to hold onto both the Paramount and Warner Bros. studio lots and keep them active, after the billionaire exec had floated leaving the state — and was even wooed by Tennessee and Texas.
But Bonta said there are no stipulations in the deal that Paramount has to keep its HQ in California. (He added that his expectation is that Ellison and co. will remain “for the foreseeable future.”)
Ellison had also previously promised that the combined Hollywood studios would release 30 films per year if the merger went through, and the new agreement will hold him to that number — with financial penalties in place for falling short. Paramount will even increase the number to 32 after two years.
Paramount also agreed to spend a minimum of $300 million per year on domestic production over the next two years — with an increase in the third year — plus a commitment to release four indie films per year. The deal says that 20% of the studio’s movies have to be classified as “blockbusters.”
On the TV and cable side, there will also be independent editorial boards for CBS News and CNN.
Lawyers worked into the wee hours to seal the deal after four states were reportedly holding out. On Sunday night, an insider close to the talks had told Page Six Hollywood: “Yesterday afternoon, I thought a deal probably gets done. Today, I think there is a ways to go. Anything could happen at anytime: A deal, calling off talks or they continue talking for days.”
But by early Monday morning, Bloomberg reported that Massachusetts, New York, Connecticut and Minnesota gave in when their reps realized the legal battle was not financially viable without California taking the lead, a source told the outlet.
A source told P6H that the talks had been bogged down over the weekend because of disagreements between the states on what their priorities were, with some focusing primarily on CNN and others concerned with the studios being separate.
An insider said that New York Attorney General Letitia James cared more about “job protections, and CNN,” while Bonta didn’t “care about CNN, but other AGs do.”
The Post reported that Bonta was rushing behind the scenes to reach a deal out of concern that Paramount would follow through on leaving the state, and that James coming to the table sealed the settlement.
The case was scheduled to go to trial next March, but costly “ticking fees” were set to kick in Oct. 1 that would have had Paramount paying Warner Bros. an estimated $7 million a day until the deal closed.
Paramount is expected to hold its own presser today to announce that it’s staying in the state, among other details. “We are grateful to Attorney General Bonta and his fellow AGs, as well as the WGA, for engaging in good faith to find a path forward to a resolution that serves all parties, and to Governor Newsom for his support throughout this process,” Ellison said in a statement Monday.
We will be back tomorrow with more on the story and its dramatic resolution.
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