It’s like that line from The Empire Strikes Back: “This deal is getting worse all the time…”
You already know that Paramount Skydance’s controversial acquisition of Warner Bros. Discovery is a $111 billion deal which pledges to make at least 30 films a year. Paramount also put a dollar figure on that output: The mega-studio will spend at least $1.5 billion in additional domestic film and TV production over five years.
But buried in the consent decree is this rather underwhelming promise: The company will allocate just $5 million per year to acquire indie films.
What this means is the company will operate a modestly funded “Independent Film Fund” to buy movies based on original screenplays or originated from film producers operating outside of Paramount, Disney, Universal or Sony.
The wildly optimistic version of this is the company pulls off six micro-budget blockbusters like Obsession (which cost $750,000). But many indie films cost in the tens of millions — particularly if they’re star-driven or effects-heavy. The Zendaya film The Drama, for instance, cost around $28 million. While the budget for the 2024 disaster Megalopolis ballooned to around $120 million.
To be fair, the deal also calls for four indie movies per year, and the $5 million figure doesn’t limit the company to only spending that amount. The 30 films a year commitment calls for 20 percent of those films to have a $50 million budget or more. But the remaining 80 percent carry no budget requirements, so Paramount could spend more on smaller films — it just isn’t obligated to.
Still, for an acquisition that has emphasized all the lucrative major franchises in play (Harry Potter, Game of Thrones, DC Universe), it’s perhaps a disappointing footnote that smaller films from new voices are promised such a thin slice of the pie. Again, the Warner Bros. and Paramount empire could and will certainly bankroll much more indie films, but the $5 million figure is a symbolic line item in the consent decree after a summer legal battle that framed the fight as an existential one for Hollywood.
The merger settlement has resulted in widespread criticism of California Attorney General Rob Bonta, who in July pledged to “ensure this unlawful merger never sees the light of day.” Yet the resulting deal required no major up-front structural changes, cable-network divestiture or valuable-IP divestiture as a condition of the merger — and it certainly does not prevent potentially widespread layoffs (it does allocate $47.5 million for workers impacted by the merger).
Instead, the deal included some rather meager behavioral guardrails. One of the penalties for violating the 30-films-per-year pledge, for instance — which Paramount Skydance CEO David Ellison already made months ago — would be for Paramount to have to sell its 49 percent of Miramax, which hardly represents a crown jewel.
In TV there was another head-scratching stipulation. If Paramount violates its pledge to negotiate the two companies’ cable portfolios separately — and fails to fix the violation within six months — it must divest BET, VH1, Comedy Central, Smithsonian Channel, Destination America and Science Channel (the one big title wrapped up in that mix is South Park, but the animated hit’s lucrative streaming deal is already at Paramount).
During a press conference Monday, Bonta repeatedly bemoaned the merger his office signed off on. “I want to be clear about something right up front: this settlement is not a vote of support for this merger. It is not a blessing of the broader merger … I don’t think these two companies should merge, but that’s not something that we are focused on with our resolution here.”
But Ellison managed to exert considerable political pressure on Bonta and other state AGs to settle, threatening — perhaps rather credibly — to relocate the studio to Texas or Tennessee, which would have been considered a disastrous outcome for Hollywood production with arguably negative consequences beyond the scope of the settlement concessions. California Gov. Gavin Newsom — who may be preparing a 2028 presidential run — personally inserted himself into negotiations to encourage a settlement, lending added pressure on Bonta.