Paramount reaches historic settlement with states, clearing way for WBD deal

What they're saying: In a press conference, California Attorney General Rob Bonta, who led the states' lawsuit, said the settlement "is not a vote of support for this merger," but said he's always willing to come to the table for "honest, good-faith negotiations."

• Paramount chair and CEO David Ellison, who had been threatening for weeks to leave California barring a settlement, said in a statement, "We are grateful to Attorney General Bonta and his fellow AGs, as well as the WGA, for engaging in good faith to find a path forward to a resolution that serves all parties, and to Governor Newsom for his support throughout this process."

Zoom out: The merger, one of the biggest in U.S. history, makes Ellison one of the most powerful figures in media.

• Upon completion of the deal, his empire will include two major movie studios (Paramount Pictures and Warner Bros.), two global streamers (Paramount+ and HBO Max) and two major news networks (CNN and CBS).
• It will also create a cable juggernaut by marrying Paramount's Viacom channels, including MTV, VH1 and Comedy Central, with WBD's cable networks, such as TBS, TNT, Food Network, Discovery, CNN and more.

Zoom in: As part of the settlement, Paramount has agreed to make a series of behavioral concessions, in exchange for not having to divest key assets, including WBD's lucrative cable networks.

• Film: Paramount has agreed to distribute at least 30 films theatrically each year for two years following the completion of the deal, and 32 films annually for the following three years.
• Each year, at least four of those films must be independent films and at least 20% must be blockbusters.
• Paramount must establish an independent film fund that it will contribute to annually.
• For five years after close, it must pay $9.5 million annually for workforce training and development for TV production and community arts organizations.
• Production: It will be required to move TV and film production back to U.S. by spending at least $300 million more each year on domestic production jobs over the next five years — a $1.5 billion total commitment.
• If Congress passes a federal production tax credit, Paramount has agreed that 20% of all film production must be in the U.S. for the first two years after the deal, and then 30% for the three years after that.

• Cable separation: Paramount and WBD will be required to continue negotiating their cable packages separately, to preserve competition.
• Editorial independence for news: Paramount must establish a news editorial independence board to support CBS and CNN's continued editorial independence.

Zoom out: A settlement represents defeat for progressive Democrats who argued the deal is anticompetitive and criticized the states' settlement discussions with Paramount.

• But California lawmakers, including Democrats, have been less confrontational in recent weeks, arguing any effort to block the deal would force Paramount and thousands of production jobs to leave the state and cripple California's economy.
• The Trump administration threw its support behind the deal when the Justice Department cleared it in June, but has weighed in more aggressively as of late.
• Last week, the DOJ filed a statement of interest in favor of Paramount Skydance's request for a bond from the suing state attorneys general to cover the costs of a merger close delay.
• The Writers Guild of America had also sued to block the merger.

The big picture: The states' suit was the final obstacle in getting the deal across the finish line.

• Paramount received regulatory approvals from dozens of federal regulatory bodies around the world, including the U.S., in the five months since WBD shareholders voted to approve the deal.

Disclosure: The author is a CNN contributor.

Editor's note: This story was updated with details from the settlement agreement.