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Paramount's Warner Bros. consent decree prices each missing film at $30 million
Paramount Skydance will owe $30 million for each film below its 30-a-year floor under the settlement that cleared its nearly $111 billion Warner Bros. deal. The fine starts with the 2027 slate and carries more weight than the threatened Miramax sale, which the company could put off into 2029.
The Investor · Invest desk
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What happened
- A federal judge approved the settlement with 12 states on Wednesday, and the companies expect the takeover to close on Oct. 6.
- The required count rises from 30 films a year in the first two commitment years to 32 a year in years three through five.
- At least four films a year must be independent, and every counted film must hold a 45-day exclusive theatrical run and stay off subscription streaming for 90 days.
- U.S. production spending must exceed the two studios' combined 2025 level by at least $300 million a year, or $1.5 billion over five years.
- After the second commitment year, the combined company can petition the court to modify its obligations.
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Why it matters
- cost From the 2027 slate on, every film short of the floor is a $30 million charge to the combined company, and making up the films later does not reverse it.
- constraint Bought-in titles can fill no more than half the count, so meeting the floor means funding at least 15 in-house productions or co-productions a year.
- decision Management's first chance to seek a lower count arrives in 2029, the same year the requirement steps up to 32 films.
Fortune's account of the decree adds up to a floor of 156 films over five years: 30 in each of 2027 and 2028, then 32 a year from 2029 through 2031 [1][2]. Of those, 103 must open on at least 2,000 screens [4]. The $30 million is due for each missing film even if the company later makes up the gap [11]. Curing a shortfall within six months protects the Miramax stake but does not cancel the fine [2][11].
From the studio's side, the fine is a price. If the company expects a film to lose more than $30 million, skipping it costs less than releasing it, before any Miramax risk is counted [2]. The decree leaves some slack in how the count is filled. In the first two years, up to 10 of the 30 films can open on fewer than 2,000 screens, and up to 11 of 32 after that [5].
The Miramax stake is the smaller penalty. Paramount, then ViacomCBS, bought its 49% in April 2020 in a deal valued at $375 million, made up of roughly $150 million upfront and $45 million a year for five years [12]. Those pieces sum to the headline figure [6]. At $30 million a film, the full 2020 deal value equals the fines on 12.5 missing films [7]. Miramax's biggest grosser is still 2002's "Chicago," at $306.8 million worldwide [13]. Among its 2020s releases, only this year's "Scary Movie" reboot has passed $200 million, at about $229 million [13].
The timetable also pushes the threat further out. A shortfall in 2027 opens a cure period that runs to the end of June 2028 [10]. If the gap stays open, the decree says the company "shall divest its entire direct and indirect ownership interest in Miramax Studios" [16]. It then has 12 more months to complete the sale, so by Fortune's count a first-year miss would not force a finished sale until mid-2029 [9].
The spending floor is harder to check from outside. Its $1.5 billion over five years is about 1.4% of the deal's nearly $111 billion price [8]. Fortune's account does not include the 2025 production spending the floor is measured against. That leaves the film count, tallied each year from 2027, as the term investors can follow [8].
The combined slate may clear 30 without strain, and then the decree costs little. The company may instead run a few films short and pay, treating $30 million a film as an operating cost [2]. Or it may hold the count through 2028 and then ask the court to change the terms [10]. I think the fine sets the floor and Miramax is a secondary penalty. The counter-case is Fortune's view that Miramax's greater value likely lies in its library [15]. That library runs to more than 700 titles, and Paramount Pictures distributes it under an exclusive long-term deal [14]. The first test comes once the 2027 count closes. A shortfall that is paid and then cured inside six months would show the company prizes the stake. A shortfall left uncured would show it treats both the fine and the stake as costs it can bear.
What to watch
- The combined company's 2027 U.S. theatrical release count against the 30-film floor and the 20 wide releases required.
- Whether Paramount petitions the court to modify its obligations once the 2028 commitment year ends.
- Passage of an uncapped federal film tax credit of at least 20%, the trigger for rules putting 20% of production in the U.S. and later 30%.