David Ellison addressed Paramount’s successful settlement with 12 state attorneys general in a Monday memo to staff after clearing the final hurdle for the $110 billion merger with Warner Bros. Discovery.
The CEO said the goal is “to close in approximately two weeks,” but noted that a merger of this scale between two companies takes time.
“With both groups’ concerns now addressed, we have complete clearance for this merger and can move toward closing,” he shared. “There’s still work ahead to get this deal across the finish line, but we’re excited to bring these two iconic companies together, as it means more opportunity for our creatives, production crews and employees across the business and more great entertainment for audiences everywhere.”
Ellison also thanked California Attorney General Rob Bonta and the other 11 state AGs for engaging in negotiations and detailed some of the settlement details.
“The agreement includes a number of commitments, including 30+ films annually and expanded U.S. film production – meant to help revitalize our industry and support the people behind it, here at home,” he wrote. “Since we launched this bid, our goal has been to build a stronger Hollywood: more stories told, greater choice for consumers, stronger competition. Combining these companies gives us the opportunity to do just that.”
The agreement, which was announced on Monday, includes a minimum investment of at least $300 million annually in domestic TV and film production, or $1.5 billion over five years.
Paramount has agreed to produce 30 films per year in the first two years of the deal, which will be upped to 32 per year in each of the following three years. At least four films per year must be independent films and at least 20% must be blockbusters. If Congress passes a federal film tax credit, Paramount agreed that 20% of all film production must be in the U.S. for the first two years of the merger and 30% of the next three.
The combined company must also establish an editorial board to monitor CNN and CBS News’ independence, which will include five established active or retired journalists who have practice journalism for a minimum of 10 years. No more than two members may be affiliated with the same political party and members are expected to serve for three years from the date of their appointment.
Bonta held a press conference following news of the settlement and made clear that the deal did not necessarily come with his “blessing.”
“I want to be clear about something right up front: this settlement is not a vote of support for this merger,” he said in a Monday press conference. “It is not a blessing of the broader merger. Broadly speaking, we believe further consolidation in markets that are central to American economic life doesn’t serve the American economy, consumers, or competition. Well, our record addressing mergers and consolidations, market concentrations that we are currently engaged in, and that we have been engaged in the past, is proof positive of that, and that work will continue.”
The merger was met with opposition by a number of organizations, including the Block the Merger coalition, who expressed their disappointment with the outcome.
“This is a bad deal for the future of film, entertainment, independent journalism, and a strong democracy in this country. We are disappointed and angry that the interests of average Americans have been trampled to benefit oligarch billionaires,” the statement read.
The group continued: “The Ellisons and other forces arrayed against us, but that didn’t stop us and so many others from standing up. We are proud of what we accomplished, and together, our coalition will keep fighting. From the thousands of leaders in the film and entertainment industry and elected officials, to the hundreds of thousands who joined them to make their voices heard, even in the face of potential retaliation, this was a grassroots movement that proved Americans are not going to take this corruption anymore. That energy is not going away.”
Also on Monday, the WGA announced that it had reached a deal with Paramount in its lawsuit. The guild stressed that it continued “to believe the merger will cause damage to writers and the industry at large,” but said that “no backing from government enforcers” meant it did not have the resources to continue with its lawsuit.
You can read the full memo below:
Team, Just a few moments ago, California Attorney General Rob Bonta, on behalf of himself and 11 other State AGs, announced a settlement that clears the path forward on the lawsuit blocking our merger with Warner Bros. Discovery. We have also reached a settlement with the Writers Guild of America. With both groups’ concerns now addressed, we have complete clearance for this merger and can move toward closing. There’s still work ahead to get this deal across the finish line, but we’re excited to bring these two iconic companies together, as it means more opportunity for our creatives, production crews and employees across the business, and more great entertainment for audiences everywhere. We’re grateful to Attorney General Bonta and his fellow AGs, and to the WGA, for engaging in good faith to reach this resolution. The agreement includes a number of commitments, including 30+ films annually and expanded U.S. film production – meant to help revitalize our industry and support the people behind it, here at home. Since we launched this bid, our goal has been to build a stronger Hollywood: more stories told, greater choice for consumers, stronger competition. Combining these companies gives us the opportunity to do just that. This is an exciting moment for our company and our industry. If you’re like me, you’re in this business because you love the art of visual storytelling – the chance to entertain, unite and inspire the world through extraordinary stories. Together, Paramount and WBD can do more of that, for audiences everywhere. And we can’t wait to get started. I know you have questions about what happens next – your role, your team and how we will work day to day. We don’t have all the answers yet, and I won’t pretend otherwise. We are tentatively planning to close in approximately two weeks. That said, closing is really just the starting line. Bringing two companies this size together takes time, and we’ll share information as it becomes available. In the meantime, if you have questions or concerns, please visit the Integration Hub, reach out to your manager or HR representative, or email [email protected]. Thank you for your patience, commitment and hard work throughout this process. I know it’s created real uncertainty, and for some of you, real anxiety – that’s not lost on me. Our people are what make this company one of the best in the world, and I’m truly grateful for your dedication and support. I’m confident we’re going to build something special together in the years ahead. Let’s go! David
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