Key facts
- California settled a lawsuit against Paramount Global's acquisition of Warner Bros. Discovery.
- Critics argue the settlement will hurt competition in Hollywood, fail to protect jobs, and lacks substantial concessions.
- Senator Elizabeth Warren called the settlement an "anti-monopoly disaster" that will result in higher prices and fewer jobs.
- California Attorney General Rob Bonta stated the settlement is not a vote of support for the acquisition.
- The settlement does not require Paramount to sell off any cable channels or intellectual property.
- The settlement includes provisions for independent editorial boards for CNN and CBS, and a penalty for failing to release 30 films annually.
California has settled a lawsuit against Paramount Global's $110 billion acquisition of Warner Bros. Discovery, a move that has drawn swift criticism from media advocates and some Democratic lawmakers who argue it will harm competition and jobs.
Critics accused California Attorney General Rob Bonta and Governor Gavin Newsom of yielding to wealthy interests, particularly Paramount CEO David Ellison, after Paramount reportedly threatened to leave the state if the lawsuit was not dropped. "Today, billionaires have yet again bribed, censored, and bullied their way to the top," said Alvaro Bedoya, a former member of the US Federal Trade Commission and adviser at the American Economic Liberties Project. "Layoffs will follow. People from L.A. to Atlanta will lose their jobs, small businesses will lose their contracts, your cable bill and movie ticket will be even more expensive."
US Senator Elizabeth Warren, a Democrat from Massachusetts, criticized the deal, stating that Paramount is a "clear candidate for antitrust scrutiny in a future pro-competition administration." She added, "This settlement greenlights an anti-monopoly disaster that will result in higher prices and fewer jobs, and enables a handful of billionaires to call the shots in the American media."
In a press conference, Bonta stated the settlement is "not a vote of support" for the acquisition, as it "does not serve competition well." However, he argued it would result in more production in California. Paramount CEO David Ellison said on Monday that the deal will strengthen competition and benefit consumers and workers.
The settlement does not require Paramount to sell off any cable channels or intellectual property, which Bonta had previously identified as making Paramount and Warner formidable in theatrical film distribution. Paramount owns franchises including "Top Gun" and "Mission: Impossible," while Warner Bros. holds rights to Batman and Harry Potter.
The agreement includes the creation of independent editorial boards for CNN and CBS, and a $30 million penalty per film for any shortfall against Paramount's pledge to release 30 movies annually. These commitments are temporary and expire within three to five years. Ensuring the merger would not harm the US entertainment industry by reducing theatrical and television productions was a top priority for many after the lawsuit was filed in July, as consolidation and cheaper production locations have led to job losses in Hollywood. John Bergmayer, legal director at Public Knowledge, stated the merger "leaves fewer studios competing for scripts and talent, gives one company greater power to dictate terms to distributors, and reduces streaming choices."