“This settlement is not a vote of support for this merger. It is not a blessing of the broader merger,” Bonta said at a press conference. “If they ever fail to comply with the many critical terms we have in our settlement, we can go to court and enforce it through court and court orders.”

The settlement talks happened weeks before the court-ordered settlement conference, which was set to take place from Oct. 14-15. The early deal cuts the legal challenges short, way in advance of the scheduled March 2027 trial.

It also comes days before Oct. 1, when Paramount was supposed to start racking up a $7 million “ticking fee” for each day the $111 billion transaction has not been closed. That was also the earliest date on which Paramount CEO David Ellison would have announced his company’s floated departure from California. The company was reportedly looking to move to Texas, Tennessee, or Georgia if no settlement was reached.

Paramount seems to be keeping its headquarters in Hollywood for now, but Bonta noted that aspect was not part of the resolution.

Bonta disclosed the terms and concessions that Paramount made to clear its pending merger with Warner Bros.

Among the confirmed terms is a commitment from Paramount and Warner Bros. to release 30 theatrical movies per year for two years, then 32 per year for three years. For every movie the merged company fails to release, a $30 million penalty will be mostly paid to workers in the entertainment industry.

Paramount also agreed to invest $1.5 billion into production spending in California over the next five years and to establish a fund for independent films. At least four of the films released under the Paramount-Warner Bros. brand must be independent.

The settlement also includes a pledge from Paramount to increase its domestic film and television production if Congress passes the federal film tax credit. That promise is also dependent on whether California or New York passes an uncapped film incentive.

Paramount will also be forming independent editorial boards for CNN and CBS News. Both news outlets are set to fall under the combined Paramount-Warner Bros. entity.

Opponents to the merger are already expressing their displeasure that Bonta has caved to Paramount.

“We vehemently oppose the agreement to allow David Ellison to take over Warner Bros. Discovery,” the Block the Merger coalition said in a statement. “This is a bad deal for the future of film, entertainment, independent journalism, and a strong democracy in this country. We are disappointed and angry that the interests of average Americans have been trampled to benefit oligarch billionaires.”

During the press conference, Bonta took a moment to address the concerns of those who are unhappy with the settlement.

“Some of you who may be watching this may have wanted a different outcome,” he said. “I understand that. I respect that. My job as attorney general is to look at the facts and look at the law, sit with my team, weigh the options in front of us, and make the best decisions for the people of California.”

A trustee will be appointed to monitor Paramount’s compliance with the agreed terms. Bonta left open the possibility of taking Paramount to court again in the future, should the company fail to comply with the terms.

In the meantime, Ellison is pleased with the resolution.

FCC EXEMPTS PARAMOUNT FROM REGULATION LIMITING FOREIGN OWNERSHIP OF BROADCASTERS

“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 [Gov. Gavin Newsom (D-CA)] for his support throughout this process,” Ellison said.

“Having now addressed the State AGs’ and WGA’s concerns, we have complete clearance for this merger and look forward to putting these commitments into action,” he continued. “Bringing Paramount and Warner Bros. Discovery together will build that stronger Hollywood, creating expanded opportunity for our people and even more great entertainment for audiences around the world.”