Paramount promised 30 movies a year to win Warner Bros. Losing Miramax if it fails may not scare it

A federal judge approved Paramount Skydance’s settlement with 12 states on Wednesday, clearing the final obstacle to its nearly $111 billion takeover of Warner Bros. Discovery. The companies now expect the deal to close Oct. 6. The states had sued to block the merger, and the settlement rests on a promise to release at least 30 films a year. Two penalties back that promise. The combined company must pay $30 million for every film it falls short each year, and it must sell its minority stake in Miramax, the once-eminent independent film distributor.

The settlement’s consent decree states, “During each Commitment Year, the Combined Entity shall cause to be released for Theatrical Release in the United States a minimum of thirty (30) Films for the first and second Commitment Years and thirty-two (32) Films for the third, fourth, and fifth Commitment Years.” A later subsection adds, “If, upon the expiration of the Theatrical Cure Period [defined as six months after the end of each year], the Combined Entity has failed to cure the shortfall, the Combined Entity shall divest its entire direct and indirect ownership interest in Miramax Studios.”

The decree attaches more conditions to that film count. In the first two years, at least 20 of the 30 films must be wide releases, meaning they open on at least 2,000 screens. That rises to 21 of 32 in years three through five. At least four films a year must be independent films, and at least half must be produced or co-produced by the combined company rather than merely acquired. Every film that counts toward the total must play exclusively in theaters for at least 45 days and stay off subscription streaming for 90.

The combined company must also spend at least $300 million more each year on U.S. production than Paramount and Warner Bros. spent in 2025, or $1.5 billion more over five years. If Congress passes an uncapped federal film tax credit of at least 20% during that period, at least 20% of the company’s film production must take place in the U.S. in the first two years, rising to 30% after........

© Fortune