By Laurel Kilgour

Funding film students and arts organizations. Backing independent films. Offering a free streaming service. Honoring union agreements. Protecting the free press. Preserving historic Melrose and Burbank studio lots. Making great movies in America again. The settlement that twelve attorneys general reached this week with Paramount and Warner Bros. Discovery offers all these perks and more. What’s not to love?

Quite a lot, actually. Of course, any settlement is a consolation prize compared with blocking a massively harmful merger altogether. This $100 billion deal—Hollywood’s largest ever—will shrink the number of movie studios from five to four, consolidate two major television studios and news networks, and more. But this settlement doesn’t even meet the standard California Attorney General Rob Bonta publicly staked out as a red line: “real, robust structural remedies” that divest major assets in the film and cable markets identified in the states’ complaint. Sure, divestiture is notionally a penalty for violating settlement terms—but the actual scope is limited to selling eleven cable channels and Paramount’s minority stake in one film company, Miramax. It’s also temporary because reacquisition is eventually allowed.

The headline behavioral remedies are likewise diminished by caveats and loopholes. The merged entity must release 30 films a year for two years, then 32 films a year for three years. But releasing is different from producing. Only half of the films must be produced—alone or jointly—by the combined entity. For the remainder, it can just distribute films that other companies were going to make anyway. For instance, distributing a film like Christopher Nolan’s $100 million hit Tenet would kill two birds with one stone, because it would also satisfy the overbroad definition of “independent film.”

The upshot is that the combined entity could make fewer films going forward than the companies made last year—a real risk, considering the cost-cutting pressures generated by the deal’s $79 billion debt load. And only 20% of the films have to be “tentpoles” shown on 3,000 screens; most can have smaller budgets and be shown in fewer theaters.

The U.S. production commitment—at least $300 million more per year than 2025 levels—appears more robust. But, like much of the deal, it is hard to know whether that goes beyond existing business plans for each company. Paramount CEO David Ellison has been lobbying for tax credits for months, and President Trump has often conditioned help for other industries on domestic production commitments. It’s also hard to know how it will be enforced. How do you police Paramount’s promise to spend that amount in the U.S. when the source of the spending data is… Paramount? Tellingly, when Bonta was asked what the parties’ baseline domestic spending was, he could not give a number. Notably, this term is tied to the U.S. broadly, rather than to any of the plaintiff states. Moreover, although the deal keeps historic studio lots, it does not require the combined entity to have its headquarters in California, leaving Paramount free to relocate its headquarters regardless of having closed the merger.

What about the most partisan flashpoint—an “Editorial Independence Board” for CNN and CBS News? First, the relationship between that provision and the antitrust claims in the complaint is tenuous. Including it fuels perceptions that the lawsuit was about partisan bloodlust despite strong evidence that the merger was presumptively illegal even under Reagan-era measures of market concentration and the judge’s preliminary finding that the case was credible. It also obscures that media consolidation is dangerous to democracy regardless of the political affiliations of the media titans involved or who happens to be president. But even proponents of the editorial monitoring approach will be disappointed: board members are appointed—and can be fired—by Paramount’s own board. In other words, fired by CEO David Ellison. Colorado Attorney General Phil Weiser and Washington Attorney General Nick Brown were wise to opt out of this misguided provision.

Worse, even the best commitments are temporary. None last longer than five years. Not the film production commitments, theatrical windows, cable negotiation guardrails, community investments, film catalog access, collective bargaining promises, or studio lot preservation. Not even the restriction on reacquiring assets divested as penalties for breaking the agreement. The rental rates negotiated for theaters are even shorter: just three years. And once the decree expires, the combined entity will be free to wield its full market power over business partners, workers, and consumers.

It’s questionable whether compliance will even last that long. There are generous cure periods and multi-phase informal dispute resolution requirements before the states can try to address violations in court. Starting two years in, the combined entity has a right to ask the court for “relief” if the decree “impairs” successful business operations and the ability to “compete effectively,” whatever that means. And the force majeure clause that excuses performance is so broad that it includes “strikes, labor disruptions, [and] economic recessions.” If the combined entity’s bad-faith collective bargaining prompts a strike, can it point to that disruption to justify abandoning commitments early? What if the artificial intelligence bubble pops, and the stock market sags? Even if attempted escape hatches ultimately fail on the merits, the lengthy dispute resolution procedures create an incentive to roll the dice.

There’s a reason the 1948 Paramount Decrees—repealed effective 2020 by a Department of Justice official who is now Paramount’s chief legal officer—structurally separated studios from cinemas. Behavioral measures alone are just too easy to game.

California Attorney General Rob Bonta was right back in August that the states’ complaint embodied a “bread and butter, meat and potatoes, black and white antitrust case.” He was also right about the red lines any real settlement would need to meet. This one is nowhere close to meeting them. While there has been much speculation about what political pressure might have prompted Bonta’s sudden heel turn, what is clear is that this decree blesses a lasting transfer of market power in exchange for a limited, escapable set of promises. We already know how this movie will end: with the harms foretold in the complaint coming true.

Laurel Kilgour is Research Manager at the American Economic Liberties Project and a former patent litigator.