BREAKING: Paramount Settles With 12 State AGs, Clearing Path to $111 Billion Warner Bros. Discovery Merger

Well, that didn't take long.

Paramount has struck a deal with the 12 state attorneys general who sued to block its acquisition of Warner Bros. Discovery, according to both Bloomberg. That removes the single biggest roadblock standing between David Ellison and the largest merger in Hollywood history, a staggering $111 billion.

The timing is no accident. Starting October 1, Paramount would've been on the hook for a $7-million-per-day "ticking fee." Nobody wants to bleed that kind of money waiting around for a trial that wasn't scheduled until March 2, 2027. Do the math. That's more than a billion dollars down the drain.

Quick refresher: California AG Rob Bonta led the 12-state coalition that went after the deal, even though the Department of Justice had already signed off on it. Judge Araceli Martinez-Olguin then granted a 28-day restraining order, saying the states had made a strong case that the merger would hurt competition in both basic cable and theatrical. Rather than fight a preliminary injunction, Paramount agreed to put everything on hold until trial.

The states' argument was pretty straightforward. Fewer studios means higher prices and fewer options for movie theaters and cable/satellite providers, and guess who ends up eating those costs? You and me.

Paramount's counter has been the same from day one: this deal is pro-competition, it'll mean more content, and it's the only way to go toe-to-toe with Netflix and Amazon. Maybe. We've heard the "bigger is better for creativity" pitch before, and it might or might not work. It's really an unprecedented situation, and we'll have to see how it plays out.

There's no doubt that David Ellison won what was essentially a game of chess between Paramount and the AGs. In recent weeks, via well-calculated media leaks, Ellison threatened to pack up and leave California for Texas or Tennessee. Paramount got state Democratic lawmakers to lean on Bonta. Even IATSE and the DGA pushed for a settlement. The campaign clearly worked.

So here we are. Warner Bros., the studio of "Casablanca," is about to be folded into Paramount. I'm not sure how anyone who cares about theatrical moviegoing is supposed to feel good about losing one more major studio. That said, I stand by my assertion that this is a better outcome for theatrical than a Netflix takeover.