• by Wayne Friedman , Staff Writer, 9 hours ago

Paramount Skydance's settlement deal for ending a 12-state lawsuit so that it could proceed and complete its merger deal with Warner Bros. Discovery gets into the weeds when it comes to specific production and marketing thresholds.

Can the company hold on with these restraints for five years?

For example, Paramount agreed to release 30 theatrical films in the first two years after the deal has closed, and 20 of them must be "wide" releases, running in no less than 2,000 U.S. screens. In years three to five after the deal is completed, the commitment jumps to 32 a year, with 21 wide releases.

In doing this, the settlement intends to bolster jobs and maintain activity -- key for many states when it comes to their local economies.

In addition, those films need to play in an exclusive theatrical window of no less than 45 days -- a current industry-wide window for theatrical movies.

While 2,000 is a good starting point, major wide-release movies are typically in a 3,500 to 4,000-plus screen range. '

So will these movies have more modest or small production budgets?

Other restrictions include: Theatrical films cannot be marketed to pay-per-view platforms or streaming until after 30 days from its initial release.  Streamers cannot run those movies -- on Paramount+ (or HBO Max) -- until 90 days after a film’s theatrical start in the U.S.

How about the theatrical marketing dollars spent for those films -- and the general production size?

Could some of these be modest, small-budget, off-season "adult-themed" movies that would eventually move to streaming services with little marketing fanfare?

There are penalties. If they don’t meet these goals, they will need to pay $30 million per film toward health care and retirement of film workers.

And what about cable networks? Essentially, Paramount needs to keep the two companies' channels housed independently -- at Paramount and WBD.

That means no adjusting or rising prices of any distribution deals with pay TV or streaming distributors.

It also seems to mean no merging, downsizing, or ending channels. At the same time, it would allow for "divestiture" of those channels -- something Paramount executives repeatedly said they did not want to pursue.

The 12-state attorney generals believe the continued operation of cable networks will preserve competition -- preventing Paramount from raising prices to distributors, which in turn could mean higher prices for consumers’ pay TV bundles.

The merged company also must continue to offer Pluto TV as a free streaming service. It could not shift to some partial monthly subscription fee for better revenue results. There could also be penalties here.

Proponents of the deal also say some of these rules will help keep the merged company from undergoing massive layoffs.

That makes sense. But one wonders: over the next five years, how long can the company truly operate along these strict guidelines?

More importantly, what happens after five years, when the second act of this drama shifts into another gear?