Movie studio Paramount agreed on Monday to settle an antitrust lawsuit filed by 12 states, clearing the last major obstacle blocking the company's $81 billion acquisition of Warner Bros. Discovery — a deal that would transform the landscape of the movie industry by placing Paramount's and Warner Bros. Discovery's film, television, and news operations under common ownership.

The settlement, which still requires approval from a judge, commits Paramount to a range of terms, including a five-year movie production plan and a $1.5 billion investment in domestic movies. That judicial review is the next milestone to watch. Several of the central commitments — the film slate targets and the cable channel negotiations — run for five years, giving the settlement a defined compliance window that extends well past the deal's completion.

State attorneys general said the agreement guarantees investment in domestic film production and includes protections for workers. Analysts, however, argue the deal is still likely to reduce competition in the industry and lead to higher prices for consumers — a tension that runs through each of the settlement's specific terms.

“Where I'm looking at this is through the consumer's point of view and resoundingly consumers are concerned about price hikes and they are preparing for price hikes,” said Mike Proulx, research director at Forrester. “They care less about the theatrical releases and some of the other industry terms. What they care about is how this is going to hit their wallets.”

Here is a closer look at the biggest terms Paramount agreed to in the settlement:

Domestic Film Production Commitments

• Paramount will spend $1.5 billion over five years — $300 million a year — top of what it spent in 2025 on filming domestically. According to the state attorneys general, only about 5% of Paramount's production is currently in the U.S.
• The company will create a five-year, $25 million fund for buying independent films.
• Paramount agreed to make 30 films a year in the first two years and 32 films a year in the following three years.
• It will release at least four independent films each year.

Those commitments dovetail with plans previously laid out by Paramount chairman and CEO David Ellison to grow the combined company's movie slate to more than 30 films a year — and, unlike a stated ambition, they now come with the enforcement terms below attached.

Penalties for Falling Short

The agreement includes enforcement mechanisms: if Paramount fails to produce the required number of films, the company will be forced to sell Miramax Studios and pay $30 million to health care and retirement trust funds associated with worker unions. In other words, the output targets are not aspirational: missing them carries a divestiture and a monetary payment.

Workforce Provisions

Paramount has said it would look for ways to save some $6 billion through job cuts in “duplicative operations” once the deal goes through. Under the settlement, the company will create a $47.5 million workforce fund for training and career development for laid-off workers. Paramount also agreed to honor previously established collective bargaining agreements and to bargain in good faith with unions.

These are the “protections for workers” the state attorneys general cited, and they land alongside the $6 billion cost-cutting plan: the money is earmarked for training and career development for laid-off workers as the combined company works through those duplicative-operation cuts.

Cable Channels and Editorial Independence

Under the agreement, Paramount will not be required to sell cable channels. However, the company must hold negotiations over basic cable channels under Paramount and Warner Bros. separately for five years. If it fails to do so, it may be forced to sell some channels under the agreement.

The settlement also calls for the creation of a board to ensure that Warner-owned CNN and CBS, owned by Paramount, maintain editorial independence. For readers of both networks, that board is the structure to watch: it is the mechanism through which editorial independence would be maintained once the news organizations operate under the same corporate owner, while the separate-negotiation requirement keeps the two channel portfolios at arm's length for the same five-year period.

This story was originally featured on Fortune.com.