California officials have agreed to end their legal challenge against Paramount’s proposed $81 billion merger with Warner Bros. Discovery, prompting celebrities to condemn the settlement as a “huge win for Trump.”
Attorney General Rob Bonta, who led the case alongside 11 other state attorneys general, and the Writers Guild of America reached separate settlements on Monday. The agreements remove a major obstacle to the deal’s completion.
The decision immediately sparked backlash in Hollywood. Marvel actor Mark Ruffalo, who has frequently spoken out on political issues, criticized Governor Gavin Newsom on X.
“Gavin Newsom hands huge win to Trump and his billionaire cronies,” Ruffalo wrote while responding to comments from Alvaro Bedoya, a senior adviser at the American Economic Liberties Project and former Federal Trade Commission commissioner.
“Today, billionaires have yet again bribed, censored, and bullied their way to the top,” Bedoya wrote. “Layoffs will follow. People from L.A. to Atlanta will lose their jobs, small businesses will lose their contracts, your cable bill and movie ticket will be even more expensive.”
Political tensions have followed Paramount’s pursuit of Warner Bros., particularly because of the relationship between the family of Paramount CEO David Ellison and President Donald Trump.
Ruffalo had previously urged Bonta to keep fighting rather than settle the case.
“Don’t you dare … 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 in just 3 weeks,” Ruffalo wrote.
The actor warned that Bonta’s constituents would “be hurt if you let this lousy deal filled with empty promises go forward.”
State Attorney General Rob Bonta, pictured above, and 11 other attorneys general have settled their lawsuit seeking to stop Paramount’s $81 billion merger with Warner Bros. Discovery
Marvel star Mark Ruffalo criticized Governor Gavin Newsom, calling the settlement a “huge win” for President Donald Trump, whose family relationship with Paramount CEO David Ellison has drawn scrutiny
Ellison welcomed Monday’s agreements with the states and the Writers Guild of America, describing them as “complete clearance” for the Warner deal and saying the merger would “build a stronger Hollywood”
The proposed combination would place major news operations under the same corporate umbrella, including CNN, which the Republican administration barred from the White House over what Trump described as unfavorable coverage.
Newsom, however, presented the settlement as a victory for workers and California’s entertainment industry.
“It protects California jobs while putting a safeguard in place to help preserve editorial independence for two of America’s most important news organizations,” the governor said.
Under the agreement announced Monday, Paramount has pledged to expand film production in the United States, establish a multimillion-dollar fund for workers affected by the merger and create new oversight of editorial independence within its news operations.
A judge must still give final approval to the settlement.
Ellison said the agreements with the states and the Writers Guild represented “complete clearance” for the transaction and repeated his view that the combined company would help “build a stronger Hollywood.”
Opponents called the terms inadequate and accused the state attorneys general of yielding to corporate pressure. Many had viewed the lawsuits as the final significant barrier to a combined Paramount-Warner company.
Negotiations remained difficult for months. Even after the companies offered additional remedies Monday, Bonta and several other attorneys general said they continued to believe the merger should not proceed.
The merger would bring major news organizations under one corporate umbrella, including CNN, which the Republican administration excluded from the White House over what Trump called unfavorable reporting
Negotiations remained tense for months, and Bonta and other state prosecutors said the new remedies had not changed their view that Paramount and Warner Bros. should not merge
The coalition, which includes California and entertainment powerhouse New York, filed suit in July. The states argued that the transaction would “extinguish competition,” reducing consumer choice for moviegoers and cable subscribers.
Monday’s settlement includes several “court enforceable” commitments from Paramount. The company has agreed to spend at least $1.5 billion more on domestic film production over five years, or $300 million annually, and contribute another $47.5 million toward training and career development for workers displaced by the merger.
Paramount must also release 30 films annually for the next two years, followed by 32 films per year for the subsequent three years.
If the company falls short, the states say it would have to divest Miramax Studios and pay $30 million for every missing film into health care and retirement funds serving Writers Guild members and other entertainment workers.
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The agreement also addresses cable programming. For the next five years, Paramount must negotiate separate distribution agreements for the basic channels currently owned by Paramount and Warner, a measure the states say is intended to limit increases in consumer prices.
The company is additionally required to establish a “News Editorial Independence Board” to oversee news operations at CBS and CNN.
At a news conference in Los Angeles, Bonta said the settlement was focused on “protecting people’s careers, the lives they’ve built here in California, the livelihoods their families rely on.” He stressed that accepting the agreement did not mean he supported the merger.
The Writers Guild of America, which filed its own lawsuit in July arguing that the deal would damage Hollywood writers, separately confirmed that it had settled its case. The union said it could not continue the costly litigation on its own.
Bonta said the settlement would protect careers and family livelihoods in California, while emphasizing that it should not be interpreted as support for the merger
Opponents described the settlement as too weak and accused state attorneys general of giving in to corporate pressure, after many had viewed the lawsuits as the last major obstacle to the merger
“We continue to believe the merger will cause damage to writers and the industry at large,” the WGA said. The union added that, as a nonprofit organization without government enforcement support, pursuing the complicated case would have cost millions of dollars.
New York Attorney General Letitia James helped secure Paramount’s agreement to contribute $17.5 million to the Writers Guild health care fund. She said her office would monitor the company to ensure it complies with both the settlement and the law.
The agreement follows growing concern that Paramount could leave California if the legal dispute dragged on, potentially costing thousands of jobs and delivering a severe blow to the state’s economy.
Paramount had previously agreed to postpone the transaction into next year to allow the legal challenges to proceed. The company later pushed for a settlement as the financial cost of waiting appeared likely to rise.
Paramount had agreed to pay shareholders a “ticking” fee of $7 million for every day the transaction remained unfinished after September 30.
When billions of dollars in debt are included, Paramount’s purchase of Warner is currently valued at roughly $111 billion based on the company’s outstanding shares.
Over the weekend, several lawmakers, including Democratic Senators Elizabeth Warren and Cory Booker, urged the states to continue challenging the agreement.
Other critics renewed their objections Monday, warning that further consolidation could give even greater power to the handful of companies already dominating the entertainment industry.
Paramount had agreed to delay the transaction into next year while the legal challenges proceeded, but later sought a settlement as the potential cost of waiting continued to increase
The settlement follows fears that Paramount could leave California if the case continued, putting thousands of jobs at risk and threatening a major economic loss for the state
Connecticut Attorney General William Tong said his priority was protecting the editorial independence of CNN and CBS News and that he had wanted the two outlets to be fully separated from the merged company
In a statement Monday, Ellison said the new company would be headquartered in Los Angeles.
“We aren’t going anywhere. Our history is here and this is where our future is being built,” he said.
Paramount has not publicly addressed speculation that it might relocate from California, and the settlement does not formally require the company to keep its headquarters in the state. Tennessee officials did, however, send Ellison a letter over the summer encouraging Paramount to move there.
Tong, whose state joined the lawsuit, said his central objective had been to safeguard the editorial independence of CNN and CBS News. He said he wanted the two news organizations fully divested from the combined company.
Tong said Paramount had refused just one week earlier to guarantee editorial independence for the outlets.
“We wanted to save ethical and independent journalism and news,” he said in a statement.
Tong and other opponents acknowledged that the states faced a difficult fight after the Trump administration declined to intervene. In June, the U.S. Justice Department issued an extensive statement backing the merger.
“The complete abdication of the federal government’s enforcement role in this fight left states with one arm tied behind our backs,” Tong said.
The Daily Mail contacted Governor Newsom’s Office, Paramount, Warner Bros., the Writers Guild of America, Attorney General Rob Bonta and Mark Ruffalo’s management team for comment.
