U.S. District Judge Araceli Martínez-Olguín has not yet approved the settlement between Paramount and 12 state attorneys general seeking to block the Paramount-Warner Bros. Discovery merger, and told a virtual hearing Thursday that a ruling will come in "due course."

The judge set the hearing to cover "outstanding questions" about the proposed consent decree. "The court isn't a rubber stamp of your agreement… I have some questions," she said in prefatory remarks. She said she wanted to "shore up the idea that this is not something that was the result of collusion, but instead was more of an arm's length process."

Paula Blizzard, senior assistant attorney general for the antitrust section of the California Attorney General's Office, told the court the settlement was an "arm's length process," and an attorney for Paramount concurred.

Blizzard defended the states' decision to settle rather than fight. "If we block the merger, it would be forever," she said. "Sometimes we say, here are some remedies that will address the harm we see, but are not going to permanently change the structure by either completely blocking the merger or [requiring] divestment, and this is one of those cases." She added that Warner Bros. Discovery, if denied the Paramount deal, would likely seek another M&A partner. The proposed settlement's conditions would remain in effect for five years.

Blizzard acknowledged the deal's broader controversy but drew a firm line. "We absolutely recognize that this merger has engendered a large amount of controversy and commentary and feelings and concerns on a whole host of issues," she said. "A lot of these are outside antitrust… But at the end of the day, this is an antitrust case, and it is focused on the antitrust law."

She also addressed Paramount CEO David Ellison's leaked statement to senior leadership that the company would seek to relocate if the merger were blocked. "There are some voices that carry a little less weight, and those are the ones that are threatening and are blackmailing us to say that they will pull out of California," Blizzard said. Josh Holian of Latham & Watkins, representing Paramount, responded: "I don't agree that anybody was blackmailing anybody." He added, "Paramount has to make business decisions about where it's going to run its operations, but it's business decisions. It's not blackmail. It's not a threat."

Martínez-Olguín questioned the condition requiring Paramount-WBD to divest its stake in Miramax Studios if the company fails to meet movie-output minimums. Holian said Paramount and Warner Bros. currently represent three of the top 20 films at the 2026 domestic box office, including the Miramax title "Scary Movie 6." "It's a Miramax property that is something that would be part of that divestiture package. It's important IP. It's an important studio for us. We do not want to divest it," he said.

On basic cable, Blizzard said the divestiture requirement serves as a deterrent. The networks at stake include several BET channels, VH1, Comedy Central, Smithsonian, Destination America and Science.

The judge assigned "homework": replies to a letter from Sen. Cory Booker (D-N.J.), due by noon PT Monday, Sept. 28. Booker wrote Thursday urging the court "to subject the proposed consent decree to an independent public-interest review before entering it," noting the settlement arrived "without a competitive impact statement, without a public comment period, and without any formal opportunity for theaters, distributors, workers, or consumers to be heard." Paramount Skydance, in a brief filed earlier Thursday, called Booker's filing an "improper pseudo-amicus submission."

The Block the Merger coalition also sought an emergency hearing to grant interested parties the opportunity to formally oppose what it called the "weak and unenforceable consent decree." Paramount Skydance opposed that motion and other intervention attempts. In an order Thursday, Martínez-Olguín granted administrative motions to file amicus briefs, with a deadline of 12:01 a.m. PT on Sept. 25.

The timing carries real financial stakes. Paramount begins accruing a ticking fee of roughly $7 million per day payable to WBD as of Oct. 1, and Ellison told staff he expects the deal to close in around two weeks if the settlement is approved promptly.

The settlement, announced Monday with the 12 Democratic AGs led by California's Rob Bonta, requires Paramount to invest at least an additional $300 million in U.S. film production annually — $1.5 billion over five years — bars the sale of the Paramount Studios and Warner Bros. lots for at least five years, and mandates at least 30 theatrical releases in the first two years and 32 in years 3-5, with a 45-day window for wide-release films. A "news editorial independence board" will set guiding editorial and journalism principles for CNN and CBS News. If the merger closes before year's end as expected, the commitments run through Dec. 31, 2031.

Separately on Thursday, Paramount announced plans to raise an additional $7.5 billion in debt through senior secured incremental term "B" loans to help fund the takeover, bringing total intended additional secured debt to approximately $44.4 billion. Every day the judge holds her ruling past Oct. 1 will now cost Paramount roughly $7 million.