A coalition of 12 state attorneys general led by California's Rob Bonta sued on July 13, 2026, to block Paramount Skydance's roughly $110 billion, all-cash purchase of Warner Bros. Discovery, arguing the combined company would extinguish competition in theatrical and blockbuster-film distribution and cable-channel distribution to pay-TV providers. That lawsuit kept the deal tied up in court for more than two months. The Writers Guild of America filed its own separate suit making a similar argument about writers' pay. On Monday, September 21, Paramount settled with all 12 states and, separately, with the WGA. Warner Bros. Discovery shareholders had already approved the deal back in April; CEO David Ellison told staff he expects it to close in about two weeks.

1. Paramount Skydance Says This Builds a Stronger Hollywood (CEO David Ellison)

The company that spent a year fighting to close this deal says the settlement proves the merger, not the lawsuit, was the pro-competitive move.

Ellison says the goal was always more competition, not less. "Our goal has always been to build a stronger Hollywood — one with more stories told, greater choice for consumers and stronger competition," he said after the settlement.

He's set a two-week clock. Ellison told staff in a Monday memo he expects the deal to close in "approximately two weeks," with the merged company headquartered in Los Angeles.

He thanked the people who sued him. Ellison said he was "grateful to Attorney General Bonta and his fellow AGs, as well as the WGA, for engaging in good faith."

2. The State AGs and Two Hollywood Unions Call the Deal Enforceable, Not Symbolic (Rob Bonta, IATSE's Matthew Loeb, DGA's Russell Hollander)

Bonta says he still doesn't think this merger should happen — but he says the settlement's terms have real teeth, and two major guilds agree.

Bonta hasn't changed his mind about the merger itself. "This settlement is not a vote of support for this merger," he said, adding that "further consolidation in markets that are central to American economic life doesn't serve the American economy, consumers, or competition well."

But he's calling the terms binding, not a press release. Bonta described the deal as "a strong solution that protects competition and consumers" — backed by a five-year, court-enforceable film-output quota, a $47.5 million worker fund, and an independent compliance monitor.

IATSE and the DGA are backing it. IATSE president Matthew Loeb thanked Bonta for "achieving protections for workers, enforceable safeguards and other important commitments." DGA national executive director Russell Hollander said the agreement "contains important binding and enforceable commitments that protect theatrical film and television markets and domestic film jobs."

3. The Writers Guild Settled Without Changing Its Mind (WGA East and West)

The WGA kept suing after the states folded — then settled anyway, still convinced the merger will hurt writers.

The WGA didn't back down on the substance. "We continue to believe the merger will cause damage to writers and the industry at large," the guild said in its statement.

It settled because it couldn't win the fight alone. Once the AGs signed off, the WGA said it faced "the reality of forging ahead alone, with no backing from government enforcers, with a complex antitrust lawsuit that would cost millions of dollars to pursue through trial."

What it got was a specific concession, not a reversal. Paramount agreed to a five-year ban on writer layoffs at CBS News Broadcast, plus a $17.5 million payment to the WGA's health fund — not a reversal of the guild's broader argument that fewer competitors means lower pay and less work for writers.

4. Block the Merger Coalition Calls It a Betrayal (Mark Ruffalo, Denis Villeneuve, Lilly Wachowski)

The coalition of actors and directors who spent months lobbying Bonta to hold out say he caved, and the fight isn't over.

The coalition says the settlement fails the public, not just the plaintiffs. "This is a bad deal for the future of film, entertainment, independent journalism, and a strong democracy in this country," the group said. "We are disappointed and angry that the interests of average Americans have been trampled to benefit oligarch billionaires."

Before the settlement, Ruffalo pushed Bonta directly not to sign one. "Don't you dare @AGRobBonta, do not cave. 5,670 film makers put their necks on the line for you to fight this merger. Another 75,000+ and counting have signed to tell you not to concede," Ruffalo wrote, adding, "You work for the people — the very people who will be hurt if you let this lousy deal filled with empty promises go forward."

The coalition says this isn't the end of it. "This isn't the last we will hear of the Ellisons or the fallout of this merger — and it's not the last you will hear from us," the group said.

Where This Lands

Paramount and the state AGs agree the legal fight is over. They don't agree on what the settlement actually bought. Ellison says it clears the way to build a bigger, stronger Hollywood. Bonta says he secured binding protections without ever endorsing a merger he still thinks concentrates too much power. The WGA settled without changing its mind about the underlying harm, and the Block the Merger Coalition says its fight just moved outside the courtroom. What happens over the next five years — whether courts actually enforce the film quotas, the worker fund, and the cable-bundling limits — is what will settle the argument the lawsuit didn't.

Sources