A federal judge in the US has approved an agreement that removes obstacles to Paramount's acquisition of Warner Bros. Discovery. This will allow for the creation of a major Hollywood media empire covering television, news, and the film industry.
Judge Araceli Martinez-Olguin from California signed the consent order, which formalizes the concessions offered by Paramount to end the antitrust litigation initiated by 12 states. These obligations are valid for five years, and the court retains the right to monitor them.
Paramount, led by David Ellison, whose very wealthy family is connected to US President Donald Trump, won a competitive tender in February for control over assets including Warner Bros. Pictures, CNN, and the streaming service HBO Max, in a bid against Netflix.
On the same day, Ellison appointed Inon Kreiz, CEO of Mattel, as co-CEO of the merged company following the merger. Ellison will remain chairman and CEO, focusing on strategy, creative direction, and technology, while Kreiz will handle daily operations and the integration of the two businesses.
Ellison stated in a release: 'The merger of Paramount and Warner Bros. Discovery to create a next-generation global media company is a transformative moment for our industry.' He added that he is adding Inon as a partner with strong leadership and the operational muscle needed for this integration.
Kreiz, who has led Mattel since 2018 and oversaw its cinematic debut with the blockbuster 'Barbie' in 2023, will join Paramount on October 5th and take a seat on the board after the deal closes.
The deal was approved by the Trump administration in June as one of the largest media mergers, but without business changes required, before 12 states filed a lawsuit to block the transaction.
It is reported that the deal financing includes about $24 billion in equity capital from sovereign funds of Saudi Arabia, Qatar, and Abu Dhabi. David Ellison's father, billionaire and Oracle founder Larry Ellison, provided significant funding and guarantees to the lenders supporting the deal.
Opponents in the film industry argued that the combined company would reduce jobs in Hollywood, which is already under pressure, and decrease the number of films produced annually. News media groups feared that CNN's independence could be compromised.
The order includes several protective measures regarding these issues, including a board of directors designed to protect CNN's editorial independence. The agreement was reached by the parties on September 21st and awaited judicial approval.
This occurred just days after Trump banned CNN, Politico, and MS NOW in the White House. These publications successfully sued the administration, achieving the reversal of that decision. Paramount threatened to leave California if State Attorney General Rob Bonta did not cease the legal proceedings.
The order requires the merged studio to release 30 films within the first two years of the deal and 32 films in each of the subsequent three years.
