California AG Bonta slams ‘behemoth’ Paramount-Warner Brothers merger deal
Paramount and Warner Bros. Discovery are moving forward with their $110 billion dollar merger, which California Attorney General Rob Bonta says could necessitate a crucial “check on oligarchy” to rescue the state’s film and TV industry.
“Consolidation would mean fewer voices speaking truth to power and fewer documentarians, filmmakers, showrunners, producers, writers, and artists shedding light on important stories that too often go untold. That’s a death knell for the film and TV industry — and for our democracy,” said Bonta in a Monday morning news conference.
Bonta said he and 12 other attorneys general are moving forward with the lawsuit which intends to invoke antitrust clauses to “check the elite few who think they are above the law,” referring to Paramount CEO David Ellison, a close acolyte of President Trump.
Bonta said he is “open to solving problems in the boardroom as opposed to the courtroom” but it is unclear whether the Bonta-led suit will pressure Paramount into a backroom deal, or whether it will escalate into a legal battle.
Warner Bros. landed in Paramount’s lap after its $83 billion dollar deal with Netflix fell through. The streaming giant was positioned to acquire much of the company, but Netflix pulled out in February when Paramount pledged to purchase all of WBD, including its news arm CNN.
Paramount has remained steadfast in its ambitions to close the merger deal before the end of September, at which point Warner Bros will become more expensive.
The merger poses a dual threat for California, given that advisors for Paramount have said Ellison would be encouraged to move the company’s headquarters if Bonta’s opposition to the merger made California “inhospitable”, which could mean another business titan leaving the state for Texas or elsewhere.
Paramount projects $6 billion in immediate cuts to accommodate Warner Bros.’ multi-billion dollar debt, which remains in the billions. Layoffs for Californians are imminent, with local officials reporting that at least 2,500 jobs are at risk in Los Angeles alone.
Many Democrats have also sounded the alarm on the combined $24 billion stemming from independent wealth funds in Saudi Arabia, Qatar, and the United Arab Emirates as major backers of the merger. Democratic Sen. Elizabeth Warren voiced concern about “foreign actors” accessing American’s information and having undue stakes in domestic markets.
Concerns have also been raised about international stakeholders influencing the American media ecosystem. At his news conference, Bonta was asked about a report that Warner Bros. would concede ownership of CNN to placate Democrats, which Bonta dubbed “the gossip machine on overdrive.”
Supporters of the deal back Ellison’s claim that the merger would allow big Hollywood studios to compete with streaming services like Amazon and Netflix which also risk causing a market takeover if not contested.
Others are doubtful of the validity of Bonta’s lawsuit. New York Post columnist Charlie Gasparino claims the lawsuit is a ploy by Bonta to calcify the support of other Democrats and constituents as another election year approaches, claiming the case is such a lofty invocation of antitrust law that “it’s almost hard to imagine how a court just won’t throw it out”.
