From Ars Technica · · 1m 50s
California caves on Paramount-Warner merger
State settles antitrust lawsuit, allowing $111 billion deal to proceed despite strong legal case.
In brief
State settles antitrust lawsuit, allowing $111 billion deal to proceed despite strong legal case. California's settlement with behavioral remedies instead of blocking the merger sets a precedent that legal challenges to media consolidation may not stop deals, even when courts find them anticompetitive. Originally…
California settles merger lawsuit
California and Paramount Skydance reached a settlement allowing the $111 billion merger with Warner Bros. Discovery to proceed. The deal drew immediate criticism from Democrats and media advocates.
FTC chair warns on behavioral remedies
Lina Khan, former FTC chair, said behavioral remedies routinely fail and the stakes are high because democracy requires open markets for journalism and creative expression.
“Behavioral remedies routinely fail, and the stakes here are particularly high given that a strong democracy requires open markets for sound journalism and creative expression.”
Other states abandoned the fight
Massachusetts, New York, Connecticut, and Minnesota initially opposed the deal but concluded the legal battle's expense was not justifiable without California leading the case.
Settlement includes limited safeguards
The deal includes independent editorial boards for CBS and CNN and a financial penalty if Paramount fails to distribute 30 films per year in theaters.
Advocates say oversight won't work
Free Press and Public Knowledge criticized the settlement, saying editorial boards are not true independence and the merger still reduces competition for scripts, talent, and streaming choices.
“This merger leaves fewer studios competing for scripts and talent, gives one company greater power to dictate terms to distributors, and reduces streaming choices.”
Trump administration preferred Paramount
Netflix originally had a deal to buy Warner Bros. but backed out after the Trump administration signaled preference for Paramount. CEO David Ellison promised to make changes at CNN.
Judge had ruled against the merger
A federal judge found the merger would likely reduce competition substantially and violate antitrust laws. Twelve states led by California sued in July to block it.
Democrats had pinned hopes on lawsuit
US Representatives Ro Khanna and Jamie Raskin urged California to block the deal, warning that Paramount's Ellison family should not own both CBS and CNN.
“Paramount, run by the Ellisons, should not own both CBS and CNN. California must not cave and take a deal that leaves both under the same owner.”
Here's the gist
California's settlement with behavioral remedies instead of blocking the merger sets a precedent that legal challenges to media consolidation may not stop deals, even when courts find them anticompetitive.
