Paramount Skydance has reportedly reached a settlement with the coalition of state attorneys general attempting to block its takeover of Warner Bros. Discovery, potentially removing one of the biggest remaining obstacles to a deal with significant implications for AEW’s media future.
According to Bloomberg, citing a person familiar with the matter, negotiations came together over the weekend after four states that had opposed terms previously outlined with California ultimately agreed to a settlement. An announcement was reportedly expected on Monday, although the complete terms have not yet been made public.
The antitrust lawsuit was filed on July 13 in the U.S. District Court for the Northern District of California by a 12-state coalition led by California Attorney General Rob Bonta. Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington joined California in challenging the transaction.
The states argued that the merger would combine two of Hollywood’s five major film distributors as well as two of the five largest basic cable channel owners.
After the court issued a temporary restraining order, Paramount and Warner Bros. Discovery agreed not to complete the transaction until either a court ruling allowed it or June 1, 2027, whichever came first. A trial had been scheduled for March 2, 2027, after Paramount unsuccessfully sought a November start date.
According to reports, the settlement includes the creation of independent editorial boards for CNN and CBS News. The merged company would also reportedly face a financial penalty if it fails to release 30 movies theatrically each year, a target Paramount CEO David Ellison has publicly committed to on several occasions.
Other concessions discussed during negotiations, according to The Wall Street Journal and Bloomberg, included maintaining the company’s presence in California, retaining both studio lots and potentially selling certain cable networks. It remains unclear which of those provisions are included in the final agreement.
Several states had sought additional concessions beyond those initially negotiated with California. CNN reported that New York Attorney General Letitia James was seeking further protections for workers, while Connecticut and at least two other states also had reservations. The states that remained opposed for longer reportedly secured the independent editorial boards as part of the eventual agreement.
If approved, the settlement would also help Paramount avoid a significant financial penalty associated with delays in completing the transaction. Beginning October 1, Paramount would reportedly owe Warner Bros. Discovery shareholders approximately $7 million per day under the terms of the merger agreement signed in late February.
The companies originally targeted the third quarter for completion. However, Variety reported that even following a settlement, closing the transaction is expected to take at least another week or so because of the financing structure, which reportedly includes approximately $24 billion from Middle Eastern government funds.
The settlement would not eliminate every legal obstacle facing the merger. The Writers Guild of America West has filed a separate antitrust lawsuit seeking to stop the transaction, and that case remains active.
Elsewhere, the proposed merger has reportedly received regulatory approval in more than 65 countries, while the Federal Communications Commission recently approved the proposed foreign ownership structure of the combined company.
The situation is particularly significant for AEW because Warner Bros. Discovery remains the promotion’s primary U.S. media partner.
AEW’s current media rights agreement with WBD, announced in October 2024 and reported to be worth an average of approximately $185 million annually, runs through the end of 2027, with WBD holding an option for 2028. Dynamite currently airs on TBS, while Collision airs on TNT, with both programs also available through HBO Max.
Any future negotiations over AEW’s media rights would therefore potentially involve the merged Paramount-Warner Bros. Discovery operation. Ellison has also discussed plans to eventually combine HBO Max and Paramount+ into a single streaming platform.
AEW President Tony Khan has repeatedly expressed optimism about what the proposed merger could mean for his company.
During a Bloomberg TV appearance in May while promoting Double or Nothing, Khan said he was highly enthusiastic about the transaction and believed it would be beneficial to AEW. When directly asked whether he believed Paramount would continue doing business with AEW, Khan answered, “100%.”
Khan has also pointed to his personal relationship with Ellison through their respective NFL connections.
Questions surrounding AEW’s position under the proposed ownership structure have intensified because Paramount already holds major UFC media rights through an agreement with TKO Group Holdings, which also owns WWE.
The Wrestling Observer Newsletter reported in May that high-level figures within WWE expected Paramount to move away from AEW after completing the Warner Bros. Discovery acquisition. Khan subsequently dismissed that suggestion.
Fightful separately reported that a Paramount source indicated there is no exclusivity provision in the company’s TKO agreement that would prevent Paramount from carrying other professional wrestling programming.
Despite the reported settlement removing a major potential barrier, the transaction has not yet formally closed, and AEW’s longer-term media position under the combined company remains undetermined.
Paramount and Warner Bros. Discovery had not publicly commented on the reported settlement at the time of the report.
