Brendan Carr says multistate antitrust challenge appears inconsistent with established competition theories as regulators and state attorneys continue to scrutinize one of the largest media mergers in recent history.
Federal Communications Commission Chairman Brendan Carr has cast doubt on the legal merits of a lawsuit brought by a coalition of state attorneys general seeking to halt Paramount’s proposed acquisition of Warner Bros. Discovery, arguing that the case may face significant hurdles in court.
According to the New York Post, which first reported Carr’s remarks, the FCC chairman described the states’ challenge as appearing “illegitimate” and questioned whether the antitrust arguments advanced by the plaintiffs align with traditional competition law principles. Carr’s comments came during a public discussion in Washington, where he suggested that reported proposals involving potential divestitures raised questions about the underlying theory of harm being asserted in the case.
The lawsuit, filed earlier this week by attorneys general from 12 states led by California and New York, seeks to block Paramount’s approximately $110 billion acquisition of Warner Bros. Discovery. State officials argue that the transaction would significantly increase concentration across film, television, streaming and cable markets, potentially resulting in higher prices, fewer programming choices and reduced incentives for content production.
California Attorney General Rob Bonta and other plaintiffs contend that combining two of Hollywood’s remaining major studios would give the merged company substantial leverage in theatrical distribution and cable programming negotiations. The states have alleged that the transaction could diminish competition for consumers and industry participants, including movie theaters, distributors and creative workers.
Carr, however, indicated that reports suggesting state officials might be open to a restructuring involving CNN raised questions about the coherence of the antitrust claims. According to TheWrap and other outlets covering his remarks, the FCC chairman said he struggled to see how concerns over competition would hinge on the inclusion or exclusion of a single cable news asset, adding that ultimate resolution of the dispute would rest with the courts.
Related: Paramount Seeks Judge’s Recusal in State Antitrust Fight Over Warner Bros. Discovery Deal
The proposed transaction has become one of the most consequential media consolidation efforts in decades. If completed, it would bring together a vast portfolio of assets, including Paramount Pictures, CBS, Paramount+, HBO Max, CNN, Warner Bros. studios and numerous cable networks. Critics argue that such a combination could further concentrate power in the hands of a small number of entertainment conglomerates, while supporters maintain that greater scale is necessary to compete with dominant technology and streaming companies such as Netflix, Amazon and YouTube.
Paramount has rejected the states’ allegations, calling the lawsuit a misapplication of antitrust law. In a company statement issued earlier this week, the company said the merger would create a stronger competitor in a rapidly changing media environment and allow for increased investment in content and creative talent. The company also argued that delays to the transaction would benefit large technology platforms that already exert significant influence over media distribution and advertising markets.
The legal challenge comes despite earlier clearance from the U.S. Department of Justice, highlighting the increasingly prominent role state attorneys general have played in merger enforcement in recent years. State-led antitrust actions have emerged as an important mechanism for scrutinizing large transactions even after federal regulators decline to intervene.
Additional opposition has also emerged from labor organizations and industry groups. The Writers Guild of America recently filed its own lawsuit seeking to block the transaction, arguing that greater consolidation could reduce opportunities for writers and intensify cost-cutting pressures across the entertainment sector.
Beyond domestic litigation, the deal continues to face review from overseas regulators, including authorities in the United Kingdom and Europe. The coalition of states has also indicated it may seek further court action, including efforts to prevent the companies from completing the merger before judicial proceedings are resolved.
Source: The New York Post
