“Today, billionaires have yet again bribed, censored, and bullied their way to the top,” says Alvaro Bedoya, a senior advisor at the American Economic Liberties Project, as 12 state attorneys general reach a settlement with Paramount over an antitrust lawsuit brought to life in the wake of Paramount and Warner Bros. Discovery’s proposed $111 billion merger. Whilst it seemed like California Attorney General Rob Bonta, who led the 12-state coalition against Paramount, would demand some significant divestitures, or “robust structural remedies” from Paramount, it seems none of this has come to pass. We don’t know all of the details yet, but here’s what is being reported by Bloomberg, Wall Street Journal, and Variety.
Variety notes of the settlement between the States and Paramount: “The two sides spent the weekend in tense discussions over Paramount’s commitments to remain in California and over guarantees for its production levels. The discussions also focused on editorial oversight of CBS News and CNN, a key concern for East Coast attorneys general. Sources said the settlement does not require Paramount to make any major divestitures.” In recent days, Paramount has been threatening to move its business out of California and look for alternate states to do its business. It seems this had some impact on the proceedings.
It’s also likely what has prompted Bedoya to note of the State AGs’ decision to find a settlement with Paramount: “People want champions who are not afraid of rich bullies. Newsom, Becerra and Bonta did not meet that mark. The people who work in the film and TV industry and the small businesses who support it will suffer as a result. And so will everyone who values dissent in our democracy.”
The Details of the Settlement Between Paramount and the State AGs
The first details of the Paramount and State AGs settlement over the Warner Bros. Merger have been released. Here is some of what the settlement entails:
- Paramount (Merged with Warner Bros. Discovery) has made a $1.5 billion commitment over five years to raise the level of United States production from 5% to 20%.
- The company agrees to produce 30 theatrical movie releases in the first two of the five-year consent decree, with that number rising to 32 films of the following three years.
- Four of the movies must be independent films and 20% must be blockbusters.
- Paramount will establish an independent film fund and pay $9.5M annually for workforce training
- It will also establish a news editorial independence board “to assure independent fact-based reporting” at CNN.
None of This Really Deals with the Idea that the Merger Is an Antitrust Agreement
I am a layman, but I’m not sure how any of the above really deals with the question of whether the Warner Bros. Discovery and Paramount Merger is an antitrust arrangement. It does feel like the above concessions mean more money in the California and United States economy, and that’s great. Although we notice there are no provisions for any layoffs resulting from the merger.
More importantly though, there are no structural remedies or divestitures required of Paramount in this settlement with the State AGs. Forgive me, but isn’t the question here whether this merger simply makes the united company too big? The fact that it can produce kind of makes the point that it may be prohibitive to the free market and competitive spirit of the economy? Again, I am no lawyer. I am just wondering.
AG Bonta Says Settlement Is Not a Vote of Support
California’s Attorney General Bonta notes that, “This settlement is not a vote of support for this merger. It is not a blessing for the broader merger … which doesn’t serve the economy or consumers well.” And also offered directly, “I don’t think these companies should merge.”
However, the settlement seems like IT IS EXACTLY THAT. So, we’re putting that down to empty words.
Paramount Claims the Merger is Pro-Competitive
Paramount, meanwhile, positions this merger as pro-competitive. The company shares that it seeks to take on other streaming giants like Netflix and Amazon. Over time, it seems to have influenced many of its naysayers to adopt this perspective as well. Leading up to this settlement between Paramount and the states, AMC, Cinemark, and Regal all shifted their stances in favor of a settlement. And that meant that Cinema United, the trade group representing theaters overall, also shifted to a pro-settlement perspective, following the views of its biggest members. This occurred despite the fact that Cinema United had initially strongly opposed the merger.
Even the WGA has now settled its own lawsuit with Paramount. The Writers’ Guild of America shared:
We continue to believe the merger will cause damage to writers and the industry at large. Now that the Attorneys General have settled with Paramount, however, as a nonprofit, the WGA must contend with the reality of forging ahead alone, with no backing from government enforcers, with a complex antitrust lawsuit that would cost millions of dollars to pursue through trial. Consequently, we have also settled our lawsuit with an agreement from Paramount to prohibit writer layoffs at CBS News Broadcast for 5 years, and to pay $17.5 million to our health fund along with our attorneys’ fees in the litigation.
We can see in this statement that the WGA would have loved to pursue this lawsuit, but were simply rendered inert by capitalism, which is truly a sad state of affairs.
Nerdist Take: The States Settlement with Paramount Doesn’t Seem Great, But Are There Even Any Good Outcomes?
However, with the states and Paramount reaching a settlement, it appears a major obstacle has been removed from Paramount and Warner Bros. Discovery’s $111 billion merger. Ultimately, as far as consumers are concerned, we’re not sure there were ever any good options on the table. And we’ll have to wait and see what concessions were actually made in this settlement before judgment. But, as ever with big business in our day and age, it feels like companies and bottom lines are much more important than a fair system that rewards the majority of people. The States seemed to be battling on behalf of their citizens for a time—but it doesn’t feel clear that they pushed as far as they could or should have.