Are the DGA and IATSE’s Conditions for a Paramount Settlement Realistic? We Weigh All 9

Can’t we just all get along? The Directors Guild and IATSE in a letter late Wednesday urged Paramount CEO David Ellison and California Attorney General Rob Bonta to put aside their differences and reach a settlement in the states’ lawsuit blocking the Paramount-Warner Bros. Discovery merger. Dragging this out into next spring in a trial without any clarity could only hurt the industry, the guilds wrote.

“We cannot overemphasize how damaging the current timeline for the trial … is to an already struggling industry,” the letter reads.

There’s real urgency here, but not without some important caveats.

The letter also included nine conditions the guilds want to see Paramount meet and agree to in order to address all of their concerns about the merger. The usual suspects, like theatrical windows and total output of films were covered, but also a request that Paramount continue to license content as a buyer and seller and to keep active a linear HBO channel, as well as quotas about filming in the U.S.

“Our goal, with respect to the proposed merger, has always been to achieve an outcome that ensures a vibrant, competitive marketplace for the production, distribution, and licensing of film and television programming that serves the interests of consumers and filmmakers alike,” the letter continues. “We believe that these conditions, if secured through a binding agreement, will largely serve this purpose.”

Let’s set aside whether all of these things would be enough for Bonta or to satisfy antitrust law. Some of the conditions are pretty big asks regardless of a lawsuit, so we wanted to break down each term one by one.

David Ellison at Apple’s ‘Fountain of Youth’ world premiere held at the American Museum of Natural History on May 19, 2025 in New York, New YorkKristina Bumphrey/Variety

“The maintenance of Paramount and WBD motion picture studios as separate studios, with each studio maintaining its own production, distribution, marketing, and exhibition groups as distinct divisions.”

Implementing this would directly address labor concerns and job losses that typically come from mega media mergers. They want to avoid something like the Disney-Fox merger, where the 20th Century and Searchlight labels still exist as divisions within Disney, but the marketing, production, and distribution teams are largely consolidated under one roof. Same with Amazon and MGM, arguably to a greater degree.

Paramount has indicated it wouldn’t be making significant labor cuts in order to address the $80 billion of debt the combined companies will carry upon merging, and to meet Paramount’s own promises of 30 movies a year, they’ll need to keep around a lot of people. But it’s hard to imagine they wouldn’t want to eliminate some redundancy and merge some functionality rather than make each studio completely autonomous. Could be a big ask.

“The production and distribution by each motion picture studio of a minimum of 15 theatrical films per year with an exclusive theatrical window of at least 45 days (preferably 60 days or more) before PVOD exploitation and 120 days before SVOD exhibition.”

Paramount has already made this exact promise in terms of the number of films per studio and the theatrical window, though with one key difference. DGA and IATSE up the ante a little and call on Paramount to extend its theatrical window to 120 days before SVOD, whereas Paramount’s current promise as outlined in the reported terms to AMC and Regal only have a 90-day SVOD minimum. 120 days would be among the longest streaming window for any movie or studio, reserved for the biggest of blockbusters or filmmakers like Christopher Nolan, who not incidentally is the president of the DGA.

“An agreement that Paramount and WBD will continue to license theatrical films from third parties at no less than the average percentage of films licensed from third parties over the past five years (excluding 2020 and 2023).”

As far as we know, an average percentage of films licensed from third parties isn’t a publicly tracked piece of data, so this is already a tough one. But essentially what they don’t want to see is a combined Warnermount shutting its doors to other content and distributors for their streamers now that they’re flush with IP of their own.

HBO Max has output deals with A24 and TCM, for instance, while Paramount+ and Showtime has historically had a first look at Bleecker Street. In theory, a combined or bundled HBO Max and Paramount+ with more subscribers might be able to better compete with Netflix in securing other licensing deals and bolster their own streamers, so we suspect it might look to do more licensing, not less.

‘Little House on the Prairie’ERIC ZACHANOWICH/NETFLIX

“The same separate operational structure for Paramount and WBD’s television studios as applied to the motion picture studios.”

This one has the same challenges as the theatrical films, but with a lot more divisions. WBD has HBO, which would make sense to keep independent, but also WBTV that produces shows like “Abbott Elementary” and “Ted Lasso,” and its Discovery networks like HGTV and Food Network shows. Paramount has Paramount Television, which makes Taylor Sheridan’s shows but also Netflix’s “Little House on the Prairie” and “Emily in Paris” and Amazon’s “Ride or Die,” all in addition to Showtime, MTV, and others.

The sheer amount of IP, production capabilities, and bulk in its cable networks is the whole point of the merger, and keeping brands like HBO independent is in Paramount’s best interest, but there’s likely some fat on the bone amid all those properties. Would it make sense to have some of those banners operate under one roof or for some of the weaker performing brands to be sold or shuttered altogether? DGA and IATSE don’t want to see jobs lost or fewer opportunities, but they know there’s bound to be changes and consolidation under any merger, no matter the conditions.

“The maintenance of HBO as a linear pay television channel that will continue to be available on third party platforms (e.g., MVPDs and Amazon video).”

We weren’t expecting this one. A demand to keep HBO on the physical airwaves but also available through other providers like Fubo and Amazon to us has less to do with antitrust or job loss as it does just continuing to make HBO accessible and affordable for the general public, though it also has residuals implications.

Paramount shuttered the linear Showtime channel even though it kept the branding, but it’s largely a shell of what it was years ago. DGA and IATSE could be thinking long term about preserving the value and the jobs that come from keeping HBO a recognizable, iconic brand, and the linear channel has something to do with that.

“A commitment to produce films and television shows in the United States at no less than the average percentage produced in the United States during the past five years (excluding 2020 and 2023).”

According to data from ProdPro, Warner Bros. between 2021 and 2025 (excluding 2023) has produced 28 feature films in the United States and 127 episodic series, while Paramount has produced 25 films and 113 series. On average, that’s 60 episodic series between the two combined studios and roughly 13 films, which would presume that a little less than half of the films the combined company intends to release each year would need to be shot here. Of note though, the ProdPro data shows that both companies have seen their U.S. productions drop significantly post-strikes in both 2024 and 2025 compared to 2021 and 2022. Last year, Paramount shot just two features in the U.S. versus 12 in 2021, according to the data, while WB had five versus 10 in 2021, as well as 14 series for Paramount and 22 series for WB, so they’ll have some catching up to do.

Ellison though has been quietly lobbying for a federal tax credit, and Warner Bros. has put down roots in Nevada while Paramount has a studio in New Jersey. So there’s some concrete signs that they each want to be here, but DGA and IATSE would love something in writing to show to their members.

Members of IATSE join SAG-AFTRA and WGA on their picket at Paramount Studios on July 21, 2023 in Los Angeles, CaliforniaGetty Images

“A commitment to license original content on the combined entity’s linear channels and streaming platforms from third parties at no less than the average percentage of licensed original content during the past five years (excluding 2020 and 2023).”

Seeing titles licensed to cable is super important for residuals for DGA and IATSE members and a big source of many members’ income. Think of all those random movies that get a whole lot of play on TNT. So if the new leadership were to change its strategy around licensing third-party content, or if some of those cable channels were closed or sold, that could really take a bite out of members’ livelihoods.

“A commitment that Paramount and WBD will continue to be sellers in the marketplace.”

Ellison has indicated he’s still willing to do just that and that being a seller makes you “much more desirable” to creative talent. Most companies that aren’t Netflix have moved away from the approach of keeping all of their content in that years-old industry buzzword “walled gardens,” and that’s true for the shows that Paramount produces for other streamers like the aforementioned “Emily in Paris” but also making shows like “South Park,” “Yellowjackets,” “Shameless,” and “Yellowstone” available elsewhere (though they definitely wanted that last one back).

“A commitment that Paramount will continue to be based in Los Angeles.”

Ellison this week told execs that he was considering a move of Paramount’s headquarters out of California if a resolution can’t be reached with the states, something Bonta referred to as an attempt to “blackmail the state to letting an illegal deal through.” Nashville has pitched itself as a potential landing spot, and Paramount and Sheridan have some roots in Texas. But what this really entails has been the subject of much debate.

If the corporate headquarters relocate, it doesn’t necessarily mean the Paramount lot, its creative executives, and all its production capability here would leave too. And much of the talent being based in Los Angeles means the studio will inherently be tied to California in some shape or form. Paramount even just secured tens of millions in tax credits from the state for filming shows like its “Clueless” series and a show called “Ascent” here. Paramount also wants to build itself up as a tech-forward company, and finding that talent in Tennessee could be a challenge.

A demand though that Paramount stick around in the town that birthed it is a no-brainer.