The $111 billion merger between Paramount and Warner Bros. Discovery has overcome its final hurdle as U.S. District Judge Araceli Martínez-Olguín has approved the settlement between Paramount and a group of State Attorneys General who had sued to block the merger. Paramount has tentatively set October 6 as the date to close the merger.
“The Court finds the proposed consent decree represents a reasonable factual and legal resolution of the dispute,” wrote U.S. District Judge Araceli Martínez-Olguín today in her order. “The parties reached their agreement following highly contested, however brief, litigation, and they reached their agreement following what they report to have been several rounds of in-depth negotiations.“
What Happens Now?
When the deal closes, it’s expected that Warner Bros. Discovery CEO David Zaslav will depart, but he won’t be leaving empty-handed. He stands to earn more than $550 million in stock and cash, which includes $34.2 million in cash severance payments.
According to the terms of the settlement, the newly merged Paramount-Warner Bros. Discovery will be prohibited from selling either the Paramount Studios or Warner Bros. lots in California for at least five years. It’s also obligated to invest at least an additional $300 million on film production in the U.S. annually. It must also release at least 30 theatrical movies in the first two years, which shouldn’t be a problem, as David Ellison has frequently promised to release that many annually. In years 3-5, that number will increase to 32, with a 45-day window for wide-release films.
A New Co-CEO
Former Mattel CEO Ynon Kreiz has been announced as Co-CEO of the merged company. “Ellison will focus on the company’s long-term strategy, creative vision and direction, including its talent relationships, strategic partnerships, technology and capital allocation,” said Paramount in a statement. “Kreiz will focus on the company’s day-to-day management and integration of the combined businesses.“
In his own statement, Ellison said, “Bringing together Paramount and Warner Bros. Discovery to create a next-generation global media company is a transformational moment for our industry.“
“Leading it takes a rare combination of strategic vision, operational depth and experience running a public company at the highest levels of media,” he added. “Ynon brings all three. In Ynon, I’m adding a partner with strong leadership and the operating firepower this integration demands. It’s a division of labor built on our complementary strengths, with clear reporting lines and it lets me focus where I can contribute most: long-term strategy, the company’s overall creative direction, talent relationships, strategic partnerships, technology and capital allocation. We’re like-minded, we see this business the same way and there’s no one I’d rather partner with. Together we’ll build one integrated company that is creator-first, tech-forward and built to scale globally.“
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