A federal judge has approved the negotiated settlement that clears the way for Paramount Skydance and Warner Bros. Discovery to merge.
U.S. District Judge Araceli Martinez-Olguin, who was appointed by former President Joe Biden, determined that the proposed settlement “reflects a procedurally sound resolution” of the legal dispute.
Martinez-Olguin’s decision came almost one week after she held a virtual hearing to question the plaintiffs and defendants on how the settlement complies with the federal antitrust law on which the lawsuit was based. The judge was satisfied with their responses, as indicated in her four-page order on Wednesday.
“The Court therefore finds that the proposed consent decree reflects a settlement between the parties that is a fair, reasonable, and good faith approach to address the competitive harms alleged in the Complaint, and does not violate the law or public policy,” she wrote.
A 12-state plaintiff coalition led by California announced the settlement early last week after holding discussions with representatives from the two film and television studios.
The antitrust lawsuit that California Attorney General Rob Bonta spearheaded was short-lived. It was filed in July and would have gone to trial in March 2027 if an agreement hadn’t been reached.
Wednesday’s ruling came just before the Oct. 1 “ticking fee” deadline, which requires Paramount to pay Warner Bros. shareholders an estimated $7 million for every day that the merger is not consummated.
The $111 billion transaction is set to close within the next week. Paramount has listed Oct. 6 as a tentative closing date in regulatory filings.
After Martinez-Olguin’s Sept. 24 court hearing, concerned parties that oppose the merger filed amicus curiae briefs urging the Biden-appointed judge to reject the settlement. Separately, Sen. Cory Booker (D-NJ) wrote a letter asking the judge to scrutinize the settlement thoroughly before making a decision. Martinez-Olguin found no reason to reject the settlement based on their objections.
“These hopes and desires for the proposed consent decree to reach farther — to achieve more — do not rise to the level of legal violations upon which the Court can reject the parties’ negotiated resolution,” she said.
After the judge’s ruling, Paramount announced the appointment of Mattel CEO Ynon Kreiz as the combined entity’s co-CEO. Kreiz will work alongside Paramount CEO David Ellison in his new role at the to-be-merged company, starting Oct. 5. Paramount did not address the ruling in its statement, but expressed its hope in finally closing the merger.
The deal has been in the works ever since Paramount outbid Netflix to acquire Warner Bros. in February. Netflix won the initial stage of the bidding war, which started last December, before ultimately bowing out.
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Beyond combining their film and television businesses, Paramount and Warner Bros. are expected to put CBS News and CNN under the same corporate umbrella. The two news outlets will remain separate as an independent editorial board oversees them. It remains to be seen how the board will be implemented.
For months, the merger has fueled concerns that Ellison would overhaul CNN in the same way he did to CBS News last year after Skydance acquired Paramount. Ellison’s father, Oracle co-founder Larry Ellison, is an ally of President Donald Trump, so anti-merger advocates are worried CNN’s coverage of the president will change drastically under Paramount’s control.