California Attorney General Rob Bonta defended his decision to settle an antitrust challenge to Paramount Skydance’s $111 billion acquisition of Warner Bros. Discovery, arguing that concessions secured from the company offered meaningful protections even though he continues to believe the media giants should not combine.
Speaking Monday in Los Angeles, Bonta acknowledged that opponents of the transaction may have preferred California and 11 other states to continue their effort to block the deal. But he portrayed the settlement as a pragmatic outcome that addressed the central concerns behind the states’ lawsuit while extracting commitments on Hollywood production, employment, competition and news independence.
“Some of you who may be watching this may have wanted a different outcome. I understand that,” Bonta said, according to Politico.
Bonta said the agreement would encourage additional film production, protect Hollywood jobs, place safeguards around cable negotiations and preserve greater competition and consumer choice. The settlement “resolves the antitrust concerns at the heart of our lawsuit” against Paramount and Warner Bros. Discovery, he said, according to Politico.
His defense underscores the difficult position facing the California attorney general after weeks of insisting that the state was prepared to take the case to trial. The settlement ends a contentious two-month legal battle that had become a significant test of California’s ability to challenge consolidation in the entertainment industry, Politico reported.
Bonta had maintained that reaching an agreement outside court would be preferable to litigation if California could secure adequate concessions. At the same time, he repeatedly said his office was preparing for a trial scheduled for March, according to Politico.
The attorney general was also facing pressure from influential figures in California and Hollywood to resolve the dispute. Politico reported that Gov. Gavin Newsom, the Directors Guild of America and gubernatorial candidate Xavier Becerra were among those advocating for a settlement or expressing concerns about the litigation.
Negotiations were hardly straightforward. Bonta last month called off planned settlement discussions after accusing Paramount of leaking information about the talks, an allegation the company denied, according to Politico.
The eventual agreement gives Bonta several concrete commitments to point to in defending his decision.
Under a consent decree cited by Politico, Paramount agreed to increase domestic film-production spending by at least $300 million annually and make 30 movies in each of the first two years after the transaction. Paramount also agreed to create an independent board of journalists to monitor the editorial independence of CNN and CBS News, which would both fall under the enlarged media company.
Read more: Paramount Reaches Deal With States, Clearing Major Hurdle to Warner Bros. Takeover
Newsom backed the outcome, calling it “a win for California workers and our creative economy” and crediting Bonta with negotiating stronger terms, according to Politico. The governor also acted as an unofficial intermediary in the discussions, Politico reported, citing a person familiar with the negotiations who was granted anonymity.
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Paramount Chief Executive David Ellison similarly welcomed the agreement and thanked Newsom for his support. Ellison said the combination would strengthen Hollywood and create additional opportunities for workers while expanding entertainment offerings for audiences around the world, according to Politico.
For Bonta, however, the settlement also brought criticism from groups that regarded the states’ lawsuit as an opportunity to prevent another major concentration of media ownership.
The Block the Merger Coalition condemned the agreement, saying it would hurt film, entertainment and independent journalism while benefiting Paramount CEO David Ellison and his father, Oracle co-founder Larry Ellison, who is financially supporting the acquisition, according to Politico.
The Writers Guild of America also maintained its opposition. The union said the merger would remain damaging to the industry and that it would now have to confront the consequences without support from government antitrust enforcers, Politico reported.
Those reactions highlight the central challenge in Bonta’s defense: He is presenting the settlement as an effective use of California’s regulatory leverage rather than an endorsement of the merger itself.
The stakes extend well beyond Hollywood production. The transaction would combine Paramount’s streaming business with HBO Max, creating a service with roughly 200 million subscribers, according to Politico. Warner Bros. Discovery would also bring its namesake studio and CNN into a company that already controls CBS and Paramount’s film and television operations.
The legal fight unfolded against a complicated political backdrop. President Donald Trump had signaled that he wanted the transaction completed and has repeatedly clashed with CNN, saying the network should be sold, according to Politico.
Paramount also explored options that raised questions about its future footprint in California. Company representatives sought about 400,000 square feet of office space in Nashville that could be available within two to three years, Politico reported last week.
Bonta’s message Monday was that continuing the courtroom fight was not the only measure of success. While stopping the merger had been the states’ original objective, he argued that the concessions California obtained could limit some of the consequences that prompted the lawsuit in the first place.
For critics, the settlement still allows a media combination they believe regulators should have prevented. For Bonta, the defense rests instead on what California secured before allowing the legal challenge to end.
Source: Politico
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