Paramount and Warner Bros. Discovery I'm now at one step away from the weddingFederal Judge Araceli Martínez-Olguín approved the agreement with the 12 American states that had opposed the operation: the maxi deal from approximately 110 billion of dollars can thus head towards closure, waiting for October 6thBut the new entertainment giant will be born with a series of constraints, from investments in cinema to editorial independence. CNN e CBS News.
La federal judge in Oakland, Araceli Martínez-Olguín, ha the agreement was approved reached with a coalition of 12 states led by California, ending the antitrust proceedings that had kept the merger on hold. The court did not add any new conditions compared to those agreed upon by the parties. Now the final step remains: the closing of the transaction is scheduled for next Tuesday, subject to final formalities.
Paramount and Warner Bros.: A New Hollywood Giant Is Born
To understand the size of the operation, just look at the names that will end up under the same roof. On one hand, there are Paramount Pictures, CBS, Paramount+, MTV, Comedy Central e Nickelodeon, as well as franchises like Mission: Impossible, Top Gun, and Yellowstone. On the other hand, there are Warner Bros., HBO, HBO Max, CNN e DC Studios, with a heritage that includes universes such as Harry Potter and Game of Thrones. Film, television, streaming, and news will therefore be brought together into a single group, creating one of the world's leading entertainment hubs.
And this is exactly it concentration fueled the long-running antitrust battle. The states had argued that the merger could excessively strengthen the new company's power in several market segments. The agreement reached with Paramount allowed them to overcome the legal hurdle without blocking the deal.
The market reaction, at least in the pre-market, Wall Street, however, is more cautious: Paramount fell 1,12% to $10,21, after gaining 3,40% the previous session. Warner was at $30,95, up 0,32%.
Paramount-Warner Bros.: The Constraints of the Merger
However, the green light did not arrive without condizioniThe new group will have to invest at least 300 millionof additional dollars each year in U.S. manufacturing for five years, for a total of at least 1,5 billion dollars.
Then there is a specific constraint on the distribution in theaters. The company will have to release at least 30 films in American theaters per year for the first two years. From the third to the fifth year, this number will increase to 32 films per year. These titles will also have a 45-day theatrical window before being released on video-on-demand. There's also a particularly burdensome clause. If the group fails to meet its theatrical release obligations, it could be forced to sell Miramax, the studio behind franchises like Scary Movie and Halloween.
The agreement also includes other constraints, including the maintenance of the main studies Paramount and Warner Bros. in Los Angeles, investments in vocational training and in independent cinema and separate negotiations on cable distribution.
CNN and CBS News launch a committee for editorial independence
The merger also brings under the same roof CNN eCBS News. For this reason the agreement provides for the creation of a News Editorial Independence Board composed of five journalists, with the task of monitor editorial independence and intervene in some disputes between journalists and management over information standards. The structure of the new body has already fueled discussions about its autonomy, especially given its ties to the governance of the new company. It will therefore be one of the factors to be considered in the post-merger phase.
Separately, Paramount reached a agreement with the Writers Guild of America: will contribute $17,5 million to the WGA health care fund and maintain the current employment level of union-represented workers at CBS News Broadcast for at least five years.
Paramount-Warner, the new team in command
Meanwhile, the managerial structure of the new group is also taking shape. David Ellison, already at the helm of Paramount, will remain chairman and CEO. He will be joined by Ynon Kreiz, current CEO of Mattel, who will assume the role of co-CEO following the closing of the transaction. Kreiz will join Paramount on October 5th, the day before the expected closing date. Kreiz brings with him the experience gained at the helm of Mattel, a company that in recent years has focused on transforming its brands into entertainment content, including through film production.
For the new group it will be above all a phase ofintegration: to combine two large organizations and bring film, television, streaming, and news under one umbrella. The stated goal of the merger is to generate over $6 billion in synergies.
On the streaming front, Casey bloys, head of HBO and HBO Max, is identified as having a central role in managing the combined group's streaming activities.
