Paramount Skydance has settled with a coalition of state attorneys general challenging its acquisition of Warner Bros. Discovery, Bloomberg reported, removing one of the biggest remaining hurdles to a deal that would place AEW’s television home under new ownership.
Bloomberg reported Monday, citing a person familiar with the matter, that the talks were completed over the weekend after four states that had opposed the terms outlined with California conceded, and that the settlement was expected to be announced later that day. Full terms have not been made public.
The antitrust lawsuit was filed in federal court in the Northern District of California on July 13 by a 12-state coalition led by California Attorney General Rob Bonta, joined by Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington. The states argued the merger would combine two of Hollywood’s five major film distributors and two of the five major basic cable channel owners. After the court granted the states a temporary restraining order, the companies agreed not to close the deal until either a court ruling or June 1, 2027, whichever came first. A trial was set for March 2, 2027, after Paramount pushed unsuccessfully for a November start.
According to reports, the agreement includes independent editorial boards for both CNN and CBS News, along with a financial penalty if the merged company fails to release 30 films theatrically each year, a target Paramount CEO David Ellison has promised publicly several times. Other concessions discussed during the weekend talks, according to reports from the Wall Street Journal and Bloomberg, included keeping the company in California, retaining both studio lots, and selling some cable channels. It is not yet clear which of those made the final agreement.
The holdout states had been pushing for more than California had outlined. CNN reported on Sunday that New York Attorney General Letitia James had been seeking additional protections for workers, and that Connecticut and at least two other states also had reservations. The states that held out longer are reported to have secured the independent editorial boards as part of the final deal.
If the terms are approved, the settlement also spares Paramount a ticking fee of roughly $7 million a day owed to Warner Bros. Discovery shareholders starting October 1. The merger agreement signed in late February had targeted closing in the third quarter. Even with a settlement in place, Variety reported that closing is expected to take at least a week or so because of the deal’s financing structure, which includes around $24 billion from Middle Eastern government funds.
The settlement does not clear every hurdle. The Writers Guild of America West has filed a separate antitrust lawsuit seeking to block the deal, and that case remains active. The merger has otherwise received regulatory approvals in more than 65 countries, and the Federal Communications Commission recently approved the proposed foreign ownership structure for the combined company.
For AEW, the outcome matters because its current U.S. media rights deal with Warner Bros. Discovery, announced in October 2024 and reported to be worth an average of around $185 million a year, runs through the end of 2027, with Warner Bros. Discovery holding an option for 2028. Dynamite airs on TBS and Collision on TNT, with both streaming on HBO Max. Any renewal talks would likely be with the merged company, which Ellison has said would combine HBO Max and Paramount+ into a single streaming service.
Tony Khan has spoken highly of Ellison and has consistently said he expects the merger to benefit AEW. On a Bloomberg TV appearance in May promoting Double or Nothing, Khan said he was very excited about the deal and that it would be great for AEW, answering “100%” when asked whether he believed Paramount would stick with the company. He has pointed to a personal relationship with Ellison through their NFL ties.
The question has drawn attention because Paramount already carries UFC under a major rights deal with TKO, which also owns WWE. The Wrestling Observer Newsletter reported in May that high-level figures inside WWE expected Paramount to drop AEW once the merger closed, a claim Khan dismissed. Fightful reported separately that a Paramount source said there is no exclusivity clause in its TKO agreement that would prevent it from carrying other wrestling programming.
Paramount and Warner Bros. Discovery have not yet commented publicly on the reported settlement.
