Paramount agrees to changes to satisfy states, clearing way for creation of media colossus.

By Benjamin Mullin, David McCabe, Shawn Hubler and Laurel Rosenhall | The New York Times

Paramount reached an agreement Monday to resolve an antitrust lawsuit delaying its $111 billion acquisition of Warner Bros. Discovery, according to four people familiar with the negotiations, eliminating the last significant barrier to the creation of an entertainment and media colossus.

A group of states, led by California Attorney General Rob Banta, a Democrat, sued Paramount in July, arguing that an acquisition of Warner Bros. Discovery would concentrate too much power over cable TV and blockbuster films under one company.

After weeks of on-again-off-again negotiations, Paramount and the states agreed to a number of concessions to complete the deal, according to the people, who spoke on condition of anonymity to discuss details not yet made public. The entertainment giant has agreed to establish a board of journalists to ensure the editorial independence of CNN and CBS News and committed to distributing 30 movies in theaters every year. The company also pledged to spend an additional $1.5 billion on film production over the next five years.

A completion of the blockbuster deal would create one of the largest entertainment companies in the world. It would pair Paramount's movie studio with Warner Bros., which has made films like "Superman," "A Minecraft Movie" and "Sinners." The combined company would also own two major streaming services, Paramount+ and HBO Max, and control both CNN and CBS News.

The deal would make David Ellison, Paramount's CEO, one of the most powerful people in the entertainment industry, backed by the fortune of his father, billionaire Oracle co-founder Larry Ellison. The Ellison family's ties to President Donald Trump -which included a dinner David Ellison hosted this spring "honoring the Trump White House" - have made Democrats and many journalists at CNN wary of the deal.

Paramount and Banta did not immediately respond to requests for comment. Bloomberg earlier reported that Paramount had reached a deal with the states.

Paramount stopped short of agreeing to concessions that would alter the fundamental makeup of the combined company, such as selling CNN or one of its movie studios. The concessions will be formalized in a consent decree, a mutually agreed upon list of compromises that resolve the lawsuit, the people said. A court still needs to approve it.

Paramount has said the deal was necessary, in part, to create a counterweight to increasingly powerful tech companies like Netflix that were muscling in on Hollywood. Paramount has agreed to pay Warner Bros. Discovery's shareholders $7 million a day if the deal does not close by Oct. 1.

Labor organizations, which represent thousands of entertainment industry employees, have been split over the deal, with some viewing it as the most pragmatic option in an industry rocked by economic contraction and technological disruption. But some critics have described Ellison's acquisition of Warner Bros. in stark, existential terms, fearing it would lead to massive layoffs and less competition in Hollywood.

CBS News has also been under a microscope since Ellison last year handpicked Bari Weiss, a contrarian critic of mainstream media, to be its editor-in-chief. This year, Weiss purged the senior leadership of "60 Minutes," the network's newsmagazine. Many star correspondents, including Scott Pelley and Anderson Cooper, either quit or were forced out.

Some of those who exited said Weiss tried to inject political bias into segments, a claim that CBS News has denied. In the aftermath, Ellison called Lesley Stahl, one of the show's remaining correspondents, to calm the turmoil and promised editorial independence for "60 Minutes."

Norman Eisen, the leader of a coalition of entertainment and news industry professionals who opposed the deal, said in an interview that his organization, Democracy Defenders, would be establishing a new program as a watchdog for CNN and CBS News.

"We and our partners will be on the case 24/7 to make sure CNN and CBS News and the new board are held accountable," Eisen said.

The states and Paramount reached a deal following increasing political pressure. Paramount had threatened to leave California, potentially relocating thousands of jobs.

After Paramount threatened to leave, Gov. Gavin Newsom, who is finishing his tenure in January and considering a run for president in 2028, said he was concerned such a move would be a blow to the state's reputation. Los Angeles Mayor Karen Bass is locked in a tight race for reelection in a city already facing waning work in show business.