U.S. District Judge Araceli Martínez-Olguín used a virtual hearing Thursday to press Paramount and the 12 state attorneys general on unresolved questions surrounding their proposed settlement of the antitrust case over the Paramount-Warner Bros. Discovery merger. The judge has not yet ruled on whether to approve the deal and gave no timeline for a decision beyond saying it would come in "due course."
Martínez-Olguín also ordered the parties to file a response to a letter sent to the court by Sen. Cory Booker (D-N.J.), with a deadline of noon PT Monday, Sept. 28.
"The court isn't a rubber stamp of your agreement," the judge said in her opening remarks. "I have some questions." She said she wanted to "shore up the idea that this is not something that was the result of collusion, but instead was more of an arm's length process."
Paula Blizzard, senior assistant attorney general for the antitrust section of the California Attorney General's Office, told the judge the negotiations were indeed conducted at arm's length, a characterization an attorney for Paramount echoed. Blizzard explained that the states were reluctant to permanently block the merger, noting that Warner Bros. Discovery would likely pursue a different merger partner if this deal fell through. "If we block the merger, it would be forever," she said. "Sometimes we say, here are some remedies that will address the harm we see, but are not going to permanently change the structure by either completely blocking the merger or completely divestment, and this is one of those cases." The settlement's conditions are set to remain in effect for five years.
Blizzard acknowledged the broader controversy surrounding the deal. "We absolutely recognize that this merger has engendered a large amount of controversy and commentary and feelings and concerns on a whole host of issues," she said. "A lot of these are outside antitrust. They reflect the country's very broad political and philosophical divides, concerns about the state of the news media, people's relationship to big companies and consolidation and corporate power, and we hear those voices, we listen to those voices, we respect those voices. But at the end of the day, this is an antitrust case, and it is focused on the antitrust law."
She also dismissed threats by Paramount CEO David Ellison, who had told senior leadership the company would consider relocating if the merger were blocked. "There are some voices that carry a little less weight, and those are the ones that are threatening and are blackmailing us to say that they will pull out of California," Blizzard said. "And the reason that that voice has very little weight is that it doesn't affect the antitrust case. This is an antitrust case."
Josh Holian of Latham & Watkins, representing Paramount, pushed back on the characterization. "I don't agree that anybody was blackmailing anybody," he said. "Paramount has to make business decisions about where it's going to run its operations, but it's business decisions. It's not blackmail. It's not a threat."
The judge also questioned a settlement condition requiring Paramount-WBD to divest its stake in Miramax Studios if the merged company fails to meet minimum movie-output requirements. Holian noted that of the top 20 films at the domestic box office so far in 2026, Paramount and Warner Bros. account for three, including the Miramax title "Scary Movie 6." "It's a Miramax property that is something that would be part of that divestiture package. It's important IP. It's an important studio for us. We do not want to divest it," he said.
In a separate order issued Thursday, Martínez-Olguín granted motions allowing outside parties to file amicus briefs, with a filing deadline of 12:01 a.m. PT on Sept. 25.
The underlying lawsuit, brought by California Attorney General Rob Bonta along with 11 other state attorneys general, alleged the combined Paramount-Warner Bros. would wield outsized power over wide-release and tentpole theatrical films as well as basic cable. Bonta had previously insisted that only structural remedies, such as divestitures, would be enough to resolve the case, yet the settlement ultimately reached contains no such provisions.
Among its key terms, Paramount is barred from selling the Paramount Studios or Warner Bros. lots in California for at least five years and must invest an additional $300 million annually in U.S. film production, totaling $1.5 billion over five years. The combined company is also required to release at least 30 movies theatrically in the first two years — a commitment Ellison has repeated publicly — and at least 32 films in years three through five, with wide releases subject to a 45-day window. A new "news editorial independence board" will be established to set guiding editorial and journalism principles for CNN and CBS News. The settlement's terms are set to run through the end of the fifth calendar year following the merger's closing; if the deal closes before year's end as expected, that would extend the commitment period through Dec. 31, 2031.
Separately, Paramount announced Thursday it would raise an additional $7.5 billion in debt through a proposed senior secured incremental tranche of term B loans, funds intended to help finance the Warner Bros. Discovery acquisition and retire other debt. The company said it now plans to raise approximately $44.4 billion in additional secured debt, on top of financing previously disclosed.
Photo: United States District Court for the Northern District of California, Public domain, via Wikimedia Commons
