Paramount sets film and theatrical pledges for WBD merger

Paramount’s Paramount WBD merger promises include maintaining both studios, releasing at least 30 theatrical films each year and giving every film a theatrical run before paid video-on-demand. The proposed acquisition still requires regulatory clearance and WBD shareholder approval, and a multistate antitrust case has put the company’s assurances under closer scrutiny.

Paramount and Warner Bros. Discovery announced a definitive merger agreement on Feb. 27. Under the agreement, Paramount said it would pay $31 a share in cash for WBD, subject to the required approvals and other closing conditions.

What has Paramount promised for Warner Bros. Discovery films?

In its announcement, Paramount said the combined company would maintain both film studios and aim to make 15 theatrical features annually from each studio. That amounts to a stated minimum of 30 theatrical releases a year.

The company also said every film would get a full theatrical release, with at least 45 days in cinemas globally before it could move to paid video-on-demand. For its most successful releases, Paramount said it intended theatrical windows of 60 to 90 days or longer.

• After cinemas, films would follow the current home-video window, with paid video-on-demand before availability on subscription streaming services, Paramount said.
• Both studios would continue licensing films and television shows to their own services and outside platforms, according to Paramount.
• Paramount said the studios would remain buyers of programming from third-party studios and independent producers.
• The company said it would continue to follow specified local release-window rules, including commitments it maintains in France.

Paramount characterized the combination of Paramount+, HBO Max and Pluto as a way to increase consumer choice, expand opportunities for creative talent and compete more strongly in streaming. Those are the company’s stated expectations, rather than outcomes established by the merger agreement.

Why are Paramount’s WBD merger promises still contested?

Deadline reported in August that a dozen state attorneys general, led by California Attorney General Rob Bonta, had sued to block the transaction on antitrust grounds. The report said a trial was set for March.

Theater trade group Cinema United, which Deadline said had strongly opposed the deal, called for safeguards before a resolution. Its requested conditions included a long-term commitment to wide theatrical releases with meaningful exclusivity and marketing, protection against higher rental terms, access to films for theaters of all sizes, and continued catalog access on reasonable conditions.

Later reporting added a question over whether the release commitments would be binding. Deadline reported that Paramount was offering to put its annual-output and release-window pledges into written commitments and consent decrees. The report does not establish that those protections had been finalized.

There is also a difference in the descriptions of windowing. Paramount’s February announcement set a 45-day minimum before paid video-on-demand and described 60-to-90-day-or-longer runs for successful films as an intention. Deadline’s August report described 45 days to paid video-on-demand and 90 days to subscription video-on-demand. The available reports do not establish final enforceable terms.

Read Paramount’s merger announcement and Deadline’s report on the theater industry’s proposed conditions.

This story draws on original reporting from CNBC.