David Ellison, CEO of Paramount Skydance, has signed a truce with 12 US states, including California and New York, promising behavioural remedies if allowed to buy Warner Bros Discovery for $110bn. The agreement requires releasing at least 30 movies a year for five years, separate distributor negotiations, separate studio lots, and a third-party monitor.

These behavioural conditions had fallen out of favour during the Biden administration, which preferred divestments or outright merger blocks. Lina Khan, Joe Biden's antitrust tsar, criticised such agreements as hard to measure and enforce. The deal reflects the Trump administration's permissive M&A approach.

Ellison had reason to strike an accord, as a ticking fee makes the merger costlier daily if not closed. The real prize remains $6bn in annual cost savings, mostly from headcount reductions. However, Paramount's true adversary is the bond market. The company will emerge with net debt of about $80bn, over six times combined ebitda. Rivals Netflix and Walt Disney have considerably more balance sheet headroom. Paramount's traded debt has fallen in price this year as leverage concerns mount.