Paramount has agreed to film-production and television-licensing conditions for its merger, New York Attorney General Letitia James announced. The commitments follow lawsuits by a coalition of attorneys general and the Writers Guild of America over the combination.
The agreement covers Paramount's combination with Warner Bros. Discovery. Paramount must produce and distribute at least 30 films a year, including 20 wide releases, and invest an additional $1.5 billion in domestic film production over five years. James said the requirements are intended to protect work for writers, crews and other entertainment-industry employees while limiting the merged company's leverage over consumers.
At least 20% of the required films must be large-budget productions, according to the attorney general's office. If Paramount fails to meet its production target, it must sell Miramax and pay $30 million for each film below the requirement. The office said most of those penalties would support health care benefits for unionized film and television workers.
The agreement also calls for more domestic production if new federal or state film tax credits take effect. The release did not specify how much additional spending that provision would require or identify a start date for the annual film quota.
For television, Paramount must negotiate licensing fees for Warner Bros. cable channels separately from its own channels. James' office said the separation is meant to reduce the company's ability to demand higher fees from distributors. Failure to follow that provision could require sales of certain cable channels.
Paramount will also create an independent board of journalists to oversee CNN and CBS and protect editorial independence, according to the announcement. The attorney general's office did not provide the board's membership or explain how its decisions would be enforced.
James said she met with unionized film and television workers while the case proceeded and would monitor compliance. Attorneys general from 11 other states joined New York in securing the commitments. The announcement did not say whether all merger litigation had ended or give a date for the companies to complete their combination.
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