Paramount Lawsuit: 12 States Agree to Settle Their Challenge to the Warner Bros. Discovery Merger With Film, Cable and Jobs Commitments, but There Is No Money for Paramount+ or HBO Max Subscribers

There is a proposed settlement, but it is not a class action and it pays nothing to viewers. The State of California v. Paramount Skydance Corp., No. 4:26-cv-07116-AMO, is an antitrust lawsuit that 12 states filed on July 13, 2026 in the U.S. District Court for the Northern District of California to stop Paramount's acquisition of Warner Bros. Discovery. The plaintiffs are California, Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington.

For Paramount+ and HBO Max subscribers: the proposed consent decree creates no fund, no refunds, no credits and no claim form, and it does not set or cap subscription prices. Its cable rule states that it “does not apply to other Combined Entity offerings (e.g., premium cable channels, streaming services, or broadcast).” HBO Max is not mentioned in the decree.

What would change for viewers: movies counted toward the decree's release minimums must play only in theaters for at least 45 days and may not appear on a subscription streaming service, including Paramount+, until at least 90 days after their U.S. theatrical release. The free, ad-supported Pluto TV service, or an equivalent, must be kept at its current service and quality level.

Where the money goes: Paramount and Warner Bros. would reimburse the states' attorneys' and expert fees up to $40 million, pay into workforce and film funds and, if the film minimums are missed, into union and other funds, all described below. The decree provides no payments to individual consumers.

Watch for fakes: there is nothing to file. Nobody legitimate will ask you to register, pay a fee or share account details for a Paramount or Warner Bros. merger payment.

The states alleged that the merger would violate Section 7 of the Clayton Act, the federal law against mergers that may substantially lessen competition. According to the parties' joint motion, the complaint named three markets: distribution of wide-release theatrical films in the United States, distribution of anticipated top-grossing films, and licensing of basic cable channels to TV distributors. Paramount and Warner Bros. disputed the claims.

The merger agreement is dated February 27, 2026. After a contested temporary restraining order, the court entered a consent order on July 24, 2026 barring the companies from closing the deal. On September 21, 2026, the states and both companies jointly asked the court to enter the proposed consent decree as a final judgment and, once it is entered, to lift that order so the merger can close.

The settlement is not an admission: the parties agreed it “shall not be construed, interpreted, or used as an admission of liability, fault, wrongdoing, or violation of any law by any Party.” California Attorney General Rob Bonta said on September 21, 2026: “This settlement is not a vote of support for this merger.”

The commitments run from the closing of the merger through the fifth calendar year after closing. If the deal closes in 2026, the decree's own example counts 2027 through 2031 as the five commitment years.

• Movies in theaters: at least 30 films a year, 20 of them wide releases on 2,000 or more screens, in the first two commitment years; 32 films, 21 of them wide releases, in years three to five; and at least four independent films every year.
• U.S. production: at least $300 million more a year, and $1.5 billion more over the period, than the two companies spent on U.S. production in 2025, with higher U.S. shares required if a federal film tax credit of at least 20% becomes law.
• If the film count is missed: $30 million for each film below the minimum, split among union health and retirement funds (50%), the Motion Picture & Television Fund (40%) and a National Association of Attorneys General antitrust fund (10%), owed even if the shortfall is cured later; if it is not cured within six months, Paramount must sell Miramax.
• Cable TV: the Paramount and Warner Bros. basic cable channels must be negotiated separately with pay-TV distributors, one cannot be made a condition of the other, and confidential fee data from one side may not be used for the other. An uncured breach can end in the sale of BET, VH1, Comedy Central, Smithsonian, Destination America and Science.
• Jobs and studios: no sale or closure of the Paramount or Warner Bros. studio lots, existing union contracts honored, $9.5 million a year for five years for workforce training and film and community arts programs ($47.5 million in total, according to the California Attorney General), and a $5 million-a-year independent film fund.
• News: a News Editorial Independence Board of five journalists for CBS News and CNN, to be set up within 180 days after closing.

Compliance would be checked by an internal compliance monitor, an independent monitoring trustee and a committee of no more than five state attorney general offices. Colorado does not join the studio-lot and news-board provisions, and Washington does not join the news-board provision. After the second full commitment year, Paramount may ask the court to modify the decree for good cause.

The decree takes effect only if U.S. District Judge Araceli Martínez-Olguín enters it. On September 22, 2026, she wrote that the court “does not yet rule” on the motion and set a hearing to address “outstanding questions regarding the factual and legal underpinnings” of the proposed decree and its implementation.

At the hearing on September 24, 2026, the court heard argument, allowed outside groups to file amicus briefs and ordered the parties to respond to a letter from U.S. Senator Cory Booker by noon on September 28, 2026. It also asked counsel to send the court an editable version of the proposed decree with redlined edits. The League of United Latin American Citizens and others asked to file a brief opposing the decree. The states and the companies each filed their responses on September 28, 2026.

As of September 30, 2026, the latest filings we reviewed, dated September 28, 2026, show no ruling on the decree. The parties have asked the court to lift the July 24, 2026 order against closing once the decree is entered.

Two other lawsuits over the same merger are on separate dockets in the same court: Writers Guild of America, West, Inc. v. Paramount Skydance Corp., No. 4:26-cv-07212, filed on July 14, 2026, and Faust v. Paramount Skydance Corp., No. 4:26-cv-03790, filed on April 30, 2026 by five individuals under the Clayton Act, seeking treble damages and an injunction.

The proposed decree resolves only the states' claims. It says that no one else is a beneficiary of it, and that nothing in it takes away any right a person has under the law independent of the decree.