A Senator’s Letter Holds the Paramount Warner Settlement

Judge Araceli Martínez-Olguín held off on September 24 from approving Paramount Skydance’s settlement with 12 states over its $110 billion Warner Bros. Discovery buyout. She ordered both sides to answer Sen. Cory Booker by noon on September 28 and said a ruling would come in due course.

The companies still cannot close until she enters the decree. A roughly $7 million daily add-on to the $31-a-share price still starts October 1 if that stamp has not come through.

A Zoom Hearing With 650 Watchers and No Stamp

The Northern District of California session ran on Zoom at 11 a.m. PT, with 650 people on the line. Martínez-Olguín had already said she had “certain outstanding questions regarding the factual and legal underpinnings” of the proposed consent decree, and she did not rule from the bench.

There’s a lot of interest. You know this, you’ve known this.

Judge Araceli Martínez-Olguín, U.S. District Court, Northern District of California, September 24 hearing

She asked the parties to “shore up the idea that it is not the result of collusion, but instead was more of an arms length process.” Paula Blizzard, a senior assistant attorney general in California’s antitrust section, told her the 12 states and Paramount had spent tens of hours on video calls, phone calls, and drafts, and that the states viewed the talks as procedurally fair.

Blizzard also said the states were wary of a permanent block. Warner Bros. Discovery could find another buyer, she argued, and the states would be back in court. “If we block the merger, it would be forever,” she said. “We believe we have five years of remedy that will remove the competitive harms we see.”

Joshua Holian of Latham & Watkins, for Paramount, told the judge the company wanted the order entered quickly “because we do want to get to work and start competing in the markets that we think we can address.” He also confirmed the point of the Miramax backstop. “It’s an important studio for us; we do not want to divest it,” he said, adding that Paramount and Warner accounted for three of the top 20 domestic films of 2026, one of them Miramax’s “Scary Movie 6.”

Martínez-Olguín asked for a written consent decree with any redlined changes, and for the name of the state committee that will watch compliance. She vacated the hearing on Paramount’s $1.88 billion bond request after the states, and separately the Writers Guild of America, reached proposed resolutions. Then she gave the room its real homework, and it was not the activist brief.

Cory Booker’s Letter Is the Assignment

Booker, the ranking member of the Senate Judiciary Subcommittee on Antitrust, Competition Policy, and Consumer Rights, filed a six-page letter the morning of the hearing. He asked the court to run an independent public-interest review before entering the decree, the same ask he has made in other antitrust settlements.

The decree does not address the core of the case, that the merger is anticompetitive and will eliminate jobs.

Sen. Cory Booker, letter to Judge Martínez-Olguín, September 24, 2026

He takes no position beyond what the states themselves pleaded, he wrote, and still wants the court to test the paper against the harm in that complaint. The Justice Department’s Antitrust Division closed its investigation on June 12, 2026, without seeking a remedy, so this state decree is the only enforceable instrument in front of a judge. It arrived without a competitive impact statement and without a formal public comment period.

Booker’s numbers are the ones the complaint already used. After the deal, he wrote, four of the five major film distributors would control over 85 percent of wide-release theatrical films, and two of the five major basic-cable owners would control 59 percent of that market. The states alleged that three firms would control 75 percent of wide-release distribution, and that Paramount and Warner, the second- and third-largest licensors of basic cable, would combine for a 27 percent share.

He pointed to earlier combinations for the labor math. Disney’s $71 billion purchase of 21st Century Fox entertainment assets in 2019, he wrote, cost more than 4,000 jobs and shrank that studio’s slate. Discovery’s 2022 purchase of WarnerMedia, which created Warner Bros. Discovery, was followed by layoffs in 2023 and 2024 that cut roughly 10 percent of the workforce. A five-year conduct deal, in that telling, is being asked to fix a permanent combination.

The judge told Paramount and the states to respond to that letter by noon on September 28. That is a date certain. The activist briefs are not.

Ten Pages by Midnight, Then an Optional Reply

Hours before the hearing, Martínez-Olguín granted emergency motions from the Block the Merger coalition, LULAC, and a separate group of Pacoima churches to file friend-of-the-court briefs. The order was blunt. Briefs had to be on the docket by 12:01 a.m. PT on September 25, the deadline would not be extended, late papers would not be considered, and no brief could exceed 10 pages.

The coalition had asked for a schedule through October 13. Paramount called that request improper and warned it would “incur tens (if not hundreds) of millions of dollars of payments while adding nothing to the record.” The judge gave the groups a voice and took away the calendar they wanted. At the hearing she made replies to those briefs optional.

Free Press, the Committee for the First Amendment, the Freedom of the Press Foundation, the Future Film Coalition, and the International Documentary Association had already called the states’ paper weak and unenforceable. Jessica J. González, co-CEO of Free Press and co-counsel on the motion, said hundreds of thousands of people had asked the attorneys general to enforce the law, and that “we deserve our day in court.”

THE GROUPS ON THE AMICUS PAPERS

• Block the Merger: Free Press, the Committee for the First Amendment, the Freedom of the Press Foundation, the Future Film Coalition, and the International Documentary Association asked to oppose the decree on the record.
• LULAC: The League of United Latin American Citizens was given the same midnight window.
• Pacoima churches: A separate filing from congregations in Pacoima asked the court to keep the no-close order in place until amici could be heard, and proposed dates in October the judge did not adopt.

The Block the Merger coalition’s public campaign had spent the summer telling the 12 attorneys general not to trade a courtroom fight for concessions. Mara Verheyden-Hilliard, on the Committee for the First Amendment steering committee, said the decree “does not serve to benefit anyone except the owner family of Paramount and those holding political power.” That is the argument now sitting in 10 pages. The court does not have to wait for an answer to it.

A $7 Million Daily Add-On Starts October 1

Paramount agreed on February 27, 2026, to pay Warner Bros. Discovery holders $31 a share in cash. If the deal is not closed by September 30, those holders receive a ticking fee of $0.25 a share for each quarter until close, about $650 million a quarter, or about $7 million a day. The extra amount is added to the $31 price and paid at closing, funded by the equity and debt already backing the buyout.

THE CLOSE CLOCK

• The fee: About $7 million a day, $0.25 a share each quarter, starting October 1 if close has not happened.
• The cash: It is not a daily wire. It raises the closing price and is paid when the deal closes.
• The outside date: A July stipulation still bars close until five days after a merits ruling, or June 1, 2027, whichever comes first, unless the judge dissolves that order by entering the decree.
• The ask: Holian told the court Paramount wants the order entered quickly so the combined company can start competing.

A delay past September 30 is therefore a higher bill at close, not a free pause. That is why Paramount fought a briefing schedule that ran to October 13. It is also why a blocked Paramount deal is not, on its own, a jobs plan. Warner would still be for sale, and the next buyer would still cut costs. Blizzard said as much when she told the judge a permanent block would send Warner looking for another partner.

HOW THE CASE GOT TO THIS HEARING

1. February 27, 2026: Paramount agrees to buy Warner Bros. Discovery for $31 a share in cash, a $110 billion enterprise deal.
2. June 12, 2026: The Justice Department closes its investigation without a remedy.
3. July 13, 2026: California leads 12 states in a Clayton Act suit; the Writers Guild of America sues the next day.
4. July 20, 2026: Martínez-Olguín issues a 14-day pause, later extended, then the parties stipulate not to close past a merits ruling or June 1, 2027.
5. September 21, 2026: The states and Paramount file a proposed consent decree and ask her to lift the no-close order.
6. September 24, 2026: She grants 10-page amicus briefs, holds the Zoom hearing, and sets Booker’s letter for answers by noon September 28.

October 1 still sits on the other side of that Monday filing. A ruling “in due course” can beat the fee, or it can miss it by a day and start a meter that runs until close.

What the Five-Year Settlement Requires

The settlement led by California’s attorney general is a five-year court order, not a breakup. Rob Bonta said it “is not a vote of support for this merger,” and that it resolves the states’ antitrust concerns “in every market alleged in our case.” The other states on the paper are Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington.

THE FIVE-YEAR TERMS

Bonta’s office says about 5 percent of Paramount’s production is in the United States now. If Congress passes a federal film tax credit of at least 20 percent, U.S. production would have to reach 20 percent of the slate in years one and two and 30 percent after that. A broader California or New York credit on top of that would push the floor to 40 percent.

The $30 million per missed film is meant to go toward union healthcare and retirement funds and to a national attorneys general antitrust fund. Holian called the Miramax sale the provision that keeps “our feet to the fire.” Booker, reading the same proposed consent decree filed September 21, called that $30 million a loophole, because the combined company can skip a film whenever the projected loss is larger than the fine, then buy Miramax back after five years.

IATSE Cheered a Bargain the Press Groups Still Fight

The split in Hollywood labor is sitting in the same press release as the terms. IATSE International President Matthew D. Loeb thanked Bonta “for a job well done” and for a framework “to protect IATSE members into the future.” Directors Guild of America National Executive Director Russell Hollander said the paper has “important binding and enforceable commitments that protect theatrical film and television markets and domestic film jobs.” Teamsters General President Sean M. O’Brien said the union supports the settlement because it “includes protections for workers on the frontlines of this merger.”

SAG-AFTRA President Sean Astin and National Executive Director Duncan Crabtree-Ireland said the deal “addresses some of our deep concerns about production levels and investment in U.S. production,” then added that these are “the lowest standards that our employers must meet.” LiUNA Local 724 Business Manager Alex Aguilar Jr. credited both Bonta and Paramount’s “continued investment in production and jobs here at home.”

The Writers Guild of America, which sued on its own in July, reached a separate proposed resolution the same day as the states. Martínez-Olguín still has to rule on that order too. The guild had argued the buyout would hit writers’ pay and shrink the range of what gets made. It is no longer trying to stop the close in this courtroom by itself.

That is the bargain the press groups refuse. González and her partners wanted a trial, not a five-year operating manual. They wanted forced sales of news assets, not a board that lives inside the decree. They wanted production dollars pinned to California, not a national spending floor that can still be met outside the state. The unions that sign off on health funds and output floors are not the same constituency as the groups that came to court over CNN, CBS, and independent film.

Booker Says the Decree Leaves the Harm

Booker’s letter is a checklist of why a conduct deal may not do the work of a breakup. The decree, he wrote, requires at least 15 films in the first two years, and 16 in the next three, to be produced or jointly produced by the combined company, and the parties have not put pre-merger output on the table. If those floors sit at or below what Paramount and Warner already released, the order requires nothing new. If they sit below combined output, it blesses a cut.

He also flagged enforcement. The monitoring trustee reports to a committee of the plaintiff states, not to the court. The only breach that must be noticed to the judge is a basic-cable violation. Disputes go to a meet-and-confer, then to non-binding mediation. A force majeure clause excuses performance for strikes, labor disruptions, or recessions, which would lift the output promise in the exact moment the company has more leverage over crews. After two years, the combined company may seek to modify the decree.

Exhibitor rate protection lasts three years of a five-year order, and the combination is permanent. Cable terms that bar bundling and cross-conditioning are hard to police, he wrote, because carriage talks are confidential and a distributor that takes a bad deal has little reason to complain about a supplier it cannot replace. Stand-alone conduct relief, under the Justice Department’s own merger-remedies manual as he cites it, is supposed to be the exception, used only when a structural fix is impossible and the conduct fully cures the harm.

WHERE THE MAIN VOICES DISAGREE

• Rob Bonta: The settlement resolves the states’ antitrust concerns in every market they pleaded and puts workers first with output floors, U.S. spending, and a $47.5 million workforce fund.
• Cory Booker: A time-limited conduct deal with a $30 million skip price and a Miramax sale the company can reverse after five years does not restore the competition Section 7 requires.
• Jessica J. González: The backroom decree is weak and unenforceable and leaves workers, journalists, and consumers without a real day in court.
• Paula Blizzard: A permanent block would send Warner to another buyer; five years of separate cable talks and film floors are the remedy the states believe removes the harm they can prove under antitrust law.

Blizzard told the judge that much of the public fight sits “outside antitrust,” including “concerns about the state of the news media” and “people’s relationship to big companies.” She said the states hear those voices and still have to try an antitrust case. González’s motion is the reply that those voices were the point of the lawsuit. Booker’s letter is the document the judge chose to have answered on a clock.

Paramount and the states owe that answer by noon on September 28. Amicus briefs were due at 12:01 a.m. PT on September 25, and replies to them are optional. The no-close order stays until Martínez-Olguín enters a decree, and the $7 million daily add-on still starts October 1 if the $31-a-share deal is not done.