Mammoth deal has raised questions about corporate consolidation and editorial independence in media.
Published On 30 Sep 202630 Sep 2026
A United States judge has entered an order giving the green light for the media giant Paramount to complete its $110bn acquisition of entertainment company Warner Bros., despite fears about the long-term impacts of media consolidation.
On Wednesday, US District Court Judge Araceli Martinez-Olguin approved a settlement between Paramount, Warner Bros, and a group of 12 states that had sued to block the merger.
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In her ruling, Martinez-Olguin described the proposed deal as a “fair, reasonable, and good faith approach to address the competitive harms”.
Analysts have long raised concerns about the acquisition, one of the largest media mergers in history.
The coalition of states that sued to block the deal, led by California, had argued that combining Paramount with Warner Bros would effectively stifle media competition. They estimated that nearly one-third of all theatrical releases and basic cable programming would be consolidated under the merger.
But the states abandoned their lawsuit in favour of a settlement on September 21.
The five-year agreement requires Paramount to abide by theatrical film release quotas, committing to 30 releases per year in the US.
It also mandates that the combined company must keep negotiations with cable providers for Warner-owned channels separate from its deals for Paramount-owned channels.
The settlement approved on Wednesday also includes the creation of a five-member panel meant to safeguard the editorial independence of CNN and CBS, two major news networks.
But sceptics have pointed out that the merger puts a large swath of US media under the control of David Ellison, who leads Paramount.
Under Wednesday’s agreement, Ellison is in charge of appointments to the board that would oversee news independence.
The Paramount CEO is the son of billionaire Oracle founder Larry Ellison, a strong backer of pro-Israel causes who has close ties to the administration of President Donald Trump.
The founder of the film production company Skydance, David Ellison acquired Paramount last year as part of another controversial merger.
The 2025 Paramount-Skydance deal brought CBS under Ellison’s control. Ahead of the merger, sceptics questioned the abrupt cancellation of the CBS comedy show The Late Show with Stephen Colbert, which had been critical of Trump.
Ellison later installed Bari Weiss, a pro-Israel media figure, as the head of CBS News in a move that also raised questions about diminished independence within major journalism outlets.
Some critics depicted Wednesday’s settlement as a further capitulation to powerful corporate interests.
“Allowing one Trump-aligned, foreign-owned conglomerate to dominate American news and entertainment is a disastrous outcome,” Senator Elizabeth Warren of Massachusetts said in the wake of the settlement’s announcement.
But public officials like California Governor Gavin Newsom had called on his state’s Attorney General Rob Bonta to scrap the 12-state effort to block the deal and to pursue a settlement instead.
Paramount emerged victorious from a bidding war with the streaming giant Netflix in February to win control of Warner Bros’s holdings.
That includes a series of media and entertainment services, including the film studio Warner Bros Pictures, CNN and HBO Max. The Trump administration approved the deal without alterations in June.
California Atty. General Rob Bonta and Paramount Skydance Chief Executive David Ellison have reached an agreement to end the state’s antitrust fight, paving the way for Ellison to complete his $111-billion purchase of Warner Bros. Discovery, said a person familiar with the matter.
The two sides have agreed to resolve antitrust claims that Bonta and 11 other state attorneys general brought in late July, said the source, who was not authorized to comment publicly on the settlement.
As part of the deal, Paramount agreed to pay a penalty if the company fails to make good on a promise to distribute 30 films per year in theaters and to spend $1.5 billion on film production in Hollywood over the next five years, said the source who was not authorized to comment.
Representatives of Paramount and Bonta did not respond to a request for comment.
A federal judge must approve the agreement. Paramount would then be poised to quickly finalize its purchase of Warner Bros. Discovery — a blockbuster combination that will reshape Hollywood by collapsing two historic film studios with rights to Batman, Harry Potter, “Top Gun,” and Bugs Bunny and by combining the HBO Max and Paramount+ streaming services.
In addition to CBS, Paramount would own dozens of cable television channels, including CNN, TBS, HGTV, Food Network and Comedy Central.
The road to a resolution was fraught. Bonta abruptly canceled a negotiation session with Paramount in late August after potential deal terms leaked. Then, after talks restarted and the settlement began taking shape, several powerful Bonta allies, including New York Atty. Gen. Letitia James and Connecticut Atty. Gen. William Tong, signaled their displeasure with proposed deal terms.
They felt the deal points didn’t go far enough to mitigate the potential clout Paramount would wield over the film and television industries if it was allowed to swallow its larger industry rival, according to three people familiar with the matter but not authorized to comment.
Ellison’s goal had long been to complete the Warner takeover by the end of September — before midterm Congressional elections and prior to a key deadline for Paramount to increase its payout to Warner Bros. Discovery shareholders. Ellison received a boost from California Gov. Gavin Newsom, Los Angeles Mayor Karen Bass and Xavier Becerra, the Democratic nominee for California governor, who pressed Bonta to end the dispute rather than take the case to trial in Oakland in March.
Newsom said he took “seriously” Paramount’s threat to leave the state. He advocated for a settlement behind the scenes, according to two people close to the matter who were not authorized to comment.
State Attorney General Rob Bonta in 2025. (Genaro Molina/Los Angeles Times)
(Genaro Molina/Los Angeles Times)
Ellison was highly motivated to strike a deal because his company’s expenses will soon accelerate. Beginning Oct. 1, Paramount is on the hook to pay Warner investors a “ticking fee” of 25 cents per quarter, per share until the deal closed. That obligation is expected to add $7 million a day to the cost of the $31 a share that Paramount agreed to pay Warner shareholders when it won the bidding war back in February.
Paramount’s takeover will be heavily leveraged. The company’s bankers have lined up nearly $80 billion in debt to finance the merger. Ellison’s father, billionaire Larry Ellison, late last year agreed to backstop the $47-billion in equity needed to complete the acquisition. Royal families from Saudi Arabia, Qatar and Abu Dhabi have agreed to chip in $24 billion for an equity stake by assuming some of Ellison’s financial commitments.
Late last week, the Federal Communications Commission approved Paramount’s request to allow the foreign investors to own nearly 50% of the merged company. The Ellison family, however, will retain its voting control.
Paramount has promised Wall Street that it would make more than $6 billion in cost cuts. A recent Los Angeles County economic report predicted the merger could lead to an estimated 4,500 workers in the Los Angeles region losing their jobs as Ellison works to combine the two companies.
The truce comes after Paramount received clearances from regulators around the world, including the European Commission, Canada and the U.S. Justice Department.
Larry Ellison separately announced plans to switch the headquarters of his software behemoth Oracle to Nashville from Austin, Texas (after Oracle relocated from Silicon Valley six years ago).
Paramount also enlisted major Hollywood unions, the Directors Guild of America and the International Alliance of Theatrical Stage Employees, and prominent cinema chains to drop their opposition to the deal.
Bonta’s suit had leaned heavily into potential harms to theatrical distribution and lawyers for the states had been banking on theater executives’ testimony at trial.
The parties also were facing a key court hearing Thursday. Paramount was poised to ask U.S. District Judge Araceli Martínez-Olguín in Oakland to make the states and the Writers Guild of America post a $1.88-billion bond that would cover some of Paramount’s delay-related deal costs should the company eventually prevail.
The states and the WGA, which also sued to block the merger, have balked at the request, which was designed by Paramount to create fissures within the coalition of states by raising doubts about the strength of their case.
Paramount’s high-profile lobbying campaign reached a crescendo in late August after Paramount called out activist-actor Mark Ruffalo, accusing him of resorting to “antisemitic tropes” to argue against the merger.
Prominent Jewish groups rushed to Paramount’s aid. Ruffalo, who frequently works with HBO, denied the allegation, saying he had a 1st Amendment right to speak against the deal as well as Oracle’s business ties to Israel. Numerous Jewish artists came to Ruffalo’s defense, saying his free speech rights were being squelched.
Bonta abruptly canceled a settlement conference, accusing Paramount of leaking confidential information.
“If you want to have an adult, legitimate, serious settlement discussion — no problem,” Bonta said during an Aug. 25 appearance in Los Angeles. “But if you want to play games, we’ve got better things to do.”
The states’ 37-page lawsuit, filed in the U.S. District Court for Northern California, claimed the Paramount-Warner combination would violate the U.S. Clayton Act, a century-old antitrust law to prevent mergers that weaken competition and raise costs for consumers.
The states, which also included Nevada, Colorado, Oregon, Washington, New Jersey and New Mexico, had argued the tie-up of two legacy movie studios would give Paramount-Warner too much marketshare in two categories — wide-release movies and potential blockbusters.
Paramount Skydance CEO David Ellison has pressed to get his blockbuster deal done before his company must make higher payouts to Warner Bros. Discovery shareholders and before the mid-term elections, which could change the makeup in Congress.
(Mark Schiefelbein / Associated Press)
The states also said Paramount-Warner would control nearly 30% of the cable television channel space with more than 50 networks.
Paramount has been facing a June 4 deadline to complete the deal — or owe Warner Bros. Discovery a $7-billion breakup fee. Paramount has already paid $2.8-billion to cover a termination fee paid to Netflix after the streamer withdrew from the auction in February.
Two years ago, the biggest record labels took artificial intelligence music generators to court for copyright infringement. Now several of them are licensing their catalogs to those same companies, and the deals are starting to turn into products.
The latest example came earlier this month, when Suno, an AI music company valued at $5.4 billion, released its first models built with licensed music from Warner Music Group, BMG and Believe. Rival Udio has licensing deals with Universal Music Group and Warner.
The companies are pitching AI as a new revenue stream for artists. But so far, none of them have disclosed what artists will be paid, how many artists have opted in, or how much input individual musicians have over whether their work is used. And some musicians and songwriters are fearful of how these AI deals might affect livelihoods.
“It’s sort of a creepy and ominous cloud,” said Matt Evans, a 35-year-old Pasadena resident who’s played brass instruments on shows like “The Late Late Show With James Corden” and Netflix’s “Dr. Seuss’s Red Fish, Blue Fish.” “The fact that I could do something once and then it could be reused, and if that’s not negotiated in a contract, then I never got to make a choice to receive additional compensation. It all comes down to the loss of money.”
The American Federation of Musicians sued Universal and Warner in June, alleging the labels licensed recordings its members played on to Suno and Udio without paying those musicians or telling the union which recordings were involved. The labels have moved to dismiss the case.
In 2024, Universal, Sony Music Entertainment and Warner sued Suno and Udio for copyright infringement, alleging the AI companies trained their models on copyrighted songs spanning many artists, genres and time periods. The settlements began the following year. Universal settled with Udio in October and became its partner, and Warner settled with both Udio and Suno in November, signing licensing deals with each.
“The reason why they would settle this is they think they’re going to profit more from licensing music to them rather than from the outcome of a lawsuit,” said Jane Davidson, an entertainment attorney at Nolan Heimann who specializes in copyright and trademark infringement.
More deals followed. Udio signed with Merlin, which licenses music on behalf of independent labels, and with independent publisher Kobalt. Suno signed with BMG in August and with Believe, owner of the DIY distribution platform TuneCore, this month. Spotify, which wasn’t part of the lawsuits, struck deals with Universal and Merlin.
Not everyone is settling. Sony filed a second lawsuit against Udio over more than 30,000 recordings, and it is still suing Suno alongside Universal, which is licensing its music to Udio and Spotify at the same time. Sony and Universal also filed a new lawsuit last week alleging that Suno’s latest model still infringes on their copyrighted works. In July, a Munich court ruled against Suno in a case brought by GEMA, which collects royalties for German songwriters and publishers.
The deals between labels and AI music platforms — on which consumers can create full songs from text prompts — share a basic promise. Artists signed to the participating labels can opt in and will be credited and paid.
But each company is building something different. Udio operates under a “walled garden” model favored by Universal, in which songs made on the platform can’t be downloaded or distributed elsewhere. Spotify’s tool, a planned paid add-on for Premium subscribers, has no launch date. Suno lets users download what they make and release it elsewhere, with download caps and watermarks meant to curb abuse; songs made with its new models can be distributed through Believe and TuneCore.
Whether an artist opts out depends on who owns the rights. Songs typically carry two copyrights — one for the composition, usually held by songwriters and their publishers, and one for the sound recording, usually owned by the label. Every contract is different, so it’s unclear how AI products will handle music where those rights are split.
Waveforms of audio files from various instruments are displayed on a computer screen during the making of an AI musical piece at Suno.
(Robert F. Bukaty / Associated Press)
“These companies are able to make deals on behalf of their artists, and their control over their music is pretty significant based on what major label contracts typically say,” Davidson said. “But I expect that we will have some artists that push back against this and say that they didn’t authorize the use of their music for this purpose.”
Warner’s agreement with Suno, for example, lets artists opt in to having their names, likenesses, voices and compositions used in AI-generated music. But Jack Brody, Suno’s chief product officer, acknowledged that labels “ultimately have their contracts in place that will have some say in what an artist can and can’t do.” It’s also not always clear whether opting out keeps an artist’s recordings out of AI training, or only out of fan-facing features.
Michelle Lewis, a songwriter and the co-founder and chief executive of the nonprofit Songwriters of North America, said the composition side of that copyright split is often the harder one to defend.
“With AI, it’s so much easier to tell if you’ve infringed on the sound recording. You know what Beyoncé and Drake’s voices sound like,” said Lewis, who wrote Cher’s “A Different Kind of Love Song,” Little Mix’s “Wings” and the music for the Disney Jr. show “Doc McStuffins.” “But songwriting is so much more nebulous, so much harder to sue.”
“From the creator side, nobody asked for this. We like our job,” added Lewis. “The job is the process and what makes it special, interesting and artful.”
Some musicians argue the deals can’t cover rights the labels don’t control. A proposed class action filed last month by Jason Isbell and other musicians alleges Suno lets users generate songs that evoke specific artists’ identities without their consent, a right-of-publicity claim the plaintiffs say belongs to performers no matter who owns their recordings. Suno disputes the claims.
Session musicians like Evans are pushing back through their union.
“By licensing our members’ performances to AI platforms like Suno and Udio without consent, credit, or compensation, companies like Universal, Warner Records, and Atlantic are bypassing the very human creators who made their catalogs valuable in the first place,” AFM International President Tino Gagliardi said in a statement.
The labels have disputed the claims and argue that these deals advance the interests of artists and songwriters.
Jonathan Wyner, head of artistic technology initiatives at Berklee College of Music’s Emerging Artistic Technology Lab, compared the AI deals to the arrival of streaming services. Wyner has advised Suno.
“It’s a good step, and I think it was an inevitable step, especially if you want to stay engaged with musicians and the creative community,” he said.
That comparison cuts both ways. Streaming grew the industry while fueling years of complaints about artist pay.
Damon Krukowski, a musician and the legislative director at United Musicians & Allied Workers, said the deals so far don’t seem to benefit working-class musicians and could be used to cut them out entirely.
“It’s a new technology, but it’s not a new corporate story,” Krukowski said. “But the tools are even more powerful. It seems within their possible reach to destroy the labor market. The major labels are just seeing dollar signs without any regard to the long-term health or sustainability of this industry, because they’re envisioning an industry without artists who can push back.”
Brody disputed that, saying Suno is building ways for independent and unsigned artists to benefit, such as its deal with Believe and TuneCore.
With terms under wraps, it’s too early to know whether any of this will pay off for artists. The tests are still ahead — whether Sony and Universal win or settle, and what the first payouts actually look like.
“A label making a deal and an individual artist having a choice are not necessarily the same thing,” said Drew Silverstein, the senior advisor for AI at music tech company BandLab Technologies. “Our music industry has a long history of new revenue streams coming into existence that benefit certain folks, and create great financial opportunities for rights holders.”
After a bitter standoff, Paramount Skydance and California Atty. Gen. Rob Bonta have made progress in settlement talks that could push Hollywood’s massive merger over the finish line, people familiar with the matter said Friday.
The two sides have quietly been negotiating a truce to end the antitrust lawsuit brought by Bonta and 11 other Democratic state attorneys general — a legal volley that has threatened to derail Paramount’s $111-billion takeover of Warner Bros. Discovery.
It’s not clear how close to a resolution the two sides are, but talks in recent days have been constructive, one of the knowledgeable sources said.
Paramount Chief Executive David Ellison is highly motivated to end the court battle with Bonta before Oct. 1, when his company will be obligated to make a higher payout — an extra $7 million a day — to Warner Bros. Discovery shareholders on top of the $81 billion the company has already agreed to pay.
For weeks, Ellison and his team have been ratcheting up political heat on Bonta to abandon his lawsuit, including threatening to pull Paramount out of Hollywood — a scenario that has rattled state and local lawmakers who desperately want to bring film jobs back to Los Angeles, not lose thousands more.
Paramount declined to comment.
A spokesperson for Bonta’s office said in a statement: “Potential settlement talks are confidential. We cannot confirm or deny whether settlement talks are occurring or their alleged substance.”
Both sides have incentives to settle. Ellison, who has leaned on his family’s connections to President Trump and Washington Republicans, would like to avoid taking on more debt for the already highly leveraged deal. And he is eager to close the transaction and take the reins at Warner Bros. before the midterm elections.
Bonta has been on a winning streak with favorable rulings against the Trump administration and social media giant Meta, and he doesn’t want to overplay his hand or risk having his coalition of state attorneys fall apart.
