Paramount-Warner Bros. merger moves forward after judge approves settlement

By Brian Stelter, Liam Reilly, CNN

(CNN) — Paramount entered the final stages of merging with Warner Bros. Discovery on Wednesday afternoon, when a federal judge approved last week’s settlement of an antitrust lawsuit filed by state attorneys general.

Minutes after Judge Araceli Martínez-Olguín issued an order accepting the settlement, Paramount CEO David Ellison announced that he is hiring Ynon Kreiz to be co-CEO of the combined company.

Kreiz has been the CEO of Mattel for the past eight years.

The media merger will unite Warner Bros. movie studio with the Paramount studio, HBO Max with Paramount+, MTV with Discovery, and CBS News with CNN, creating one of the biggest media companies in the world.

Paramount said the merger is expected to “close,” or take effect, on October 6. The new name of the combined company could be announced as soon as this Thursday.

Ellison, who has been pursuing the mega-merger for the past year, said in a press release he wanted to add a partner to help run the combined Paramount-WBD.

Ellison will remain chairman and CEO, while Kreiz will be co-CEO and will join the combined company’s board of directors.

“It’s a division of labor built on our complementary strengths, with clear reporting lines,” Ellison said, “and it lets me focus where I can contribute most: long-term strategy, the company’s overall creative direction, talent relationships, strategic partnerships, technology and capital allocation.”

That means Kreiz “will focus on the company’s day-to-day management and integration of the combined businesses,” according to the Paramount press release.

Ellison said the combined Paramount-WBD would be “creator-first, tech-forward and built to scale globally.”

Management shakeups are already underway. On Tuesday, Paramount’s streaming chief, Cindy Holland, said she was leaving the company, which signaled to Hollywood that HBO chief Casey Bloys will oversee a merged Paramount-HBO streaming platform.

Ellison’s team is expected to make further announcements about the leadership team in the coming days.

But Paramount needed the judge’s sign-off first.

When the state AGs sued to stop the deal in July, Martínez-Olguín initially ruled in their favor and blocked Paramount from taking control of WBD for a period of weeks that turned into months.

The state AGs, led by California attorney general Rob Bonta, entered into intensive settlement talks in mid-September, and Paramount agreed to several behavioral remedies – like minimum annual film-release targets – but not the structural remedies that Bonta initially said he wanted.

“I think the most important thing that turned the tide was the realization that there wasn’t an antitrust case,” Paramount chief legal officer Makan Delrahim said at a conference hosted by TheWrap on Wednesday.

The state AGs announced the settlement on September 21, so Martínez-Olguín’s approval on Wednesday was the final necessary step.

The timing of the court approval was striking: It came on the last day before October 1, when a “ticking fee” is slated to go into effect, increasing the cost of WBD for Paramount.

One of the terms of the settlement is an “editorial independence board” for CNN and CBS News. The board is meant to “ensure independent, objective, fact-based reporting at CBS News and at CNN,” Bonta said when announcing the deal.

Kreiz’s appointment on Wednesday starts to round out the list of individuals who can appoint the five members of the editorial independence board.

According to the settlement terms, the five board members will be appointed by the merged company’s board of directors and report to its chief compliance officer.

The board will monitor CBS News and CNN’s “adherence to ethical journalism as defined by journalism industry best practices and to editorial independence, including from the combined entity’s ownership and shareholders,” the settlement stated.

So far, the only confirmed members of the merged Paramount-WBD’s board are Ellison and Kreiz.

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