Paramount Skydance and Warner Bros. Discovery clear final legal hurdle to merger

A federal court enters a consent decree with twelve states, lifting the order that had blocked the deal from closing

Paramount Skydance and Warner Bros. Discovery have settled the state lawsuit that sought to block their merger, entering a consent decree with twelve states, including California and New York. The U.S. District Court for the Northern District of California entered the decree on September 30, 2026, modifying its no-close order to allow the deal to proceed.

The decree binds the combined company to five-year commitments. These include a set number of annual theatrical film releases, terms for cable affiliation negotiations, at least $300 million in additional annual U.S. production spending compared with 2025 levels, and reimbursement of up to $40 million in state attorneys' fees. If the company fails to meet the terms, it must divest either Miramax Studios or several basic cable channels.

Separately, the two companies settled an antitrust suit brought by the Writers Guild of America. They agreed to contribute $17.5 million to the Writers' Guild Industry Health Fund and to cover up to $6.0 million of the union's legal costs. The company said it does not expect either settlement to materially affect the synergy and leverage targets it previously announced for the deal.

The court's entry of the consent decree is the last procedural step after weeks of state-by-state settlements, turning the no-close order into a formal green light rather than another partial concession. Financing for the deal, including a $44.4 billion notes offering and equity commitments, was already in place, leaving the court's sign-off as the final gating item. With that cleared and the writers' suit also resolved, what remains is mechanical: the exchange transfer and warrant issuance tied to the merger's close can now proceed on the timeline the company had laid out.