What’s at stake — legally and politically — in Paramount merger
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- Paramount and Warner Bros. Discovery have been trying to merge since 2024.
- California Atty. Gen. Rob Bonta and other state attorneys general sued to block the $110-billion merger on antitrust grounds.
- Gov. Gavin Newsom and his likely successor, Xavier Becerra, are receiving pressure from Paramount to settle the case.
SACRAMENTO — It’s hard being a global titan these days, when despite beaucoup bucks spent bending government to your will, any little ant of a state attorney general can crawl up your pant leg and bite.
Just ask David Ellison.
After, well, the world seemingly fell in line with his long-planned $110-billion merger of Paramount Skydance and Warner Bros. Discovery in recent weeks, a dozen state attorneys general, led by California’s Rob Bonta, have stymied the deal with a so-far-successful lawsuit that has put the whole thing on ice.
That has Paramount, and presumably Ellison, big mad-sad. So much so that a company lawyer this week suggested Paramount could move out of California if Bonta doesn’t back down.
For those of us in the cheap seats, the whole plot of the Paramount merger has become so convoluted and nebulous it‘s hard to follow exactly what’s going on, and what it all means.
So let’s pull back, and take a big-picture look at what’s happening and what’s at stake — legally and politically.
Legally pretty good
First, the recap: Paramount and Warner Bros. Discovery have been trying to merge since 2024. European regulators, along with those in other countries, cleared the deal, with some conditions in place.
U.S. regulators also backed the deal (which was not surprising considering Paramount went out of its way to court Trump, maybe even settling a multimillion-dollar suit and canning Stephen Colbert as part of that), making it seem like it was all but done.
In an op-ed, Ellison tries to allay worries that he can be trusted to run CNN
Then, recently, 12 state attorneys general led by Bonta sued to stop the merger on antitrust grounds and won a temporary restraining order.
So why did the states sue?
Trump’s idea of regulation seems to be to OK anything he likes, or that personally benefits him. Therefore, “the states have come in and played a really important role, since the DOJ has basically walked away from a lot of interest enforcement,” said George Hay, a professor of law and economics at Cornell University. “The states take this really seriously.”
While there have been lots of angles on this merger in the media (including concerns over foreign investments), the antitrust lawsuit is really fairly narrow — the main argument is that the merger will “kill off theaters,” Hay said, and hurt consumers and creators.
Bonta has pointed out that after the merger, the new Paramount would control about 27% of films released into theaters in the U.S., along with basic cable distribution.
On those narrow grounds, “the states have done a good job putting together a credible case, a case that a court’s likely to regard as being plausible,” said William Kovacic, a professor of law at George Washington University.
While the lawsuit is only in preliminary stages, Harry First, a professor of law emeritus at New York University and an expert in antitrust matters, said it has a “decent chance of succeeding.”
That has to worry Paramount, because a long, drawn-out court case is bad for business.
“If you go through appeals, it means that your transaction hangs suspended in the air for a couple of years,” Kovacic said. “It creates all sorts of uncertainty about the future direction of the business.”
The issues that don’t matter, but actually do
Paramount also has PR headaches involved with this deal, though they largely lie outside the scope of the legal action.
Whether or not CNN would retain its editorial independence has been a huge topic of debate. Ellison’s dad, billionaire Larry Ellison, is a huge F.O.T. (friend of Trump) with a hard-right tilt.
The younger Ellison has already been accused of destroying the integrity of “60 Minutes.” Many fear (or hope, depending on their politics) that he will do the same to CNN. But that’s not really an antitrust issue, although Ellison has tried to claim this is political persecution by liberal states.
There’s also been talk from labor unions and some politicians that the merger will hurt workers, which seems like a reasonable fear. In general, First points out, less competition leads to more power for the remaining owners to set the terms of employment.
Again, that’s not what the lawsuit is actually focused on.
Politics front and center
But both of those issues have become popular talking points, more prevalent than the actual issues in the lawsuit.
That reality is creating a political headache for some big political heads, including California Gov. Gavin Newsom and governor-in-waiting Xavier Becerra, who are increasingly receiving pressure from Paramount to make this all go away.
That thumbscrew campaign lost all subtlety this week at a Politico event in Sacramento, where Paramount’s chief legal officer Makan Delrahim said the company would consider leaving the state.
“If I was governor, I wouldn’t want to lose Hollywood from the state. I wouldn’t want to lose a major company like Paramount to another state,” Delrahim said.
California Atty. Gen. Rob Bonta would like Paramount-Warner antitrust trial to unfold in April. Paramount is pushing for November.
Both Newsom and Becerra in recent days have indicated they would prefer some sort of settlement, avoiding a long legal battle that could kill the deal entirely.
NYU’s First sees that as “the weakness of Democrats who say they don’t like concentration and they don’t like concentration in the media and they don’t like companies getting bigger and bigger, and then they fold when the companies have political power.”
Let’s look at that power more closely, though, because if you recall, there are 11 other attorneys general in this suit, including from powerful states such as New York and Colorado.
That means “California doesn’t necessarily dictate what will happen to the case,” Hay said. “It may well be Ellison will twist Newsom’s arm to get Newsom to twist the attorney general’s arm to call off the case or take a very favorable settlement, but it doesn’t kick the other states out.”
While Bonta, at the same Politico event, said he’s had private conversations with Newsom on the issue, he also doesn’t seem interested in folding.
“In a span of weeks, Paramount agreed to halt the merger until a court decision or until June 2027, asked for a November trial, and is now back with another attempt to blackmail the state into letting an illegal deal through. Paramount has lost the plot as it continues to lose in court. It didn’t work the first time — on the eve of our July lawsuit — and it won’t work this time,” Bonta said in a recent social media post.
Don’t forget, Bonta has his own aspirations for governor, and Hay points out that AGs often see antitrust cases as “a political stepping stone” because they are popular with voters.
So what’s next?
As the lawsuit is currently written, First and other legal experts agreed this would be a hard case to settle because it doesn’t leave a lot of room for dealmaking.
That, of course, doesn’t mean a deal couldn’t be done.
But it’s unlikely Ellison will force California to crumble with so many other states in the game, no matter how many threats Paramount drops, and unlikely the merger will escape this lawsuit without concessions that the attorneys general can cite as victories.
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Ideas expressed in the piece
The column portrays the multistate lawsuit against the Paramount–Warner Bros. Discovery merger as a rare instance in which state attorneys general are stepping in to fill what experts describe as a gap left by federal antitrust enforcement, noting that the Department of Justice has already cleared the $110-billion deal while 12 Democratic-led states have sued and secured a temporary halt to the transaction.[1][3][4][8][12][13]
In keeping with this framing, the piece emphasizes that the legal challenge is narrowly focused on traditional antitrust concerns: it argues the combined company would control roughly a quarter to a third of the U.S. market for wide-release theatrical films and basic cable channels, which could “kill off theaters,” raise prices, reduce content quality and quantity, and give the merged firm greater leverage over workers and creators.[3][7][8][9]
The article stresses that more sensational issues dominating public debate—such as whether CNN would retain editorial independence under a Trump-aligned ownership, or whether the merger would harm workers—are largely outside the scope of the formal complaint, yet have become central political talking points that magnify public suspicion about David Ellison and Paramount’s motives.[8][10]
The column contends that Paramount is using political pressure tactics, including public hints that the company could move out of California, to push Gov. Gavin Newsom and prospective gubernatorial candidate Xavier Becerra toward a settlement, and presents comments from Paramount’s chief legal officer about “losing Hollywood” as evidence of an overt attempt to leverage the state’s economic dependence on the entertainment industry.[5]
Moreover, the piece suggests this episode exposes a broader tension within Democratic politics: it argues that leading Democrats often speak against corporate concentration and media consolidation but are inclined to “fold” when confronted with the political and economic power of large companies, pointing to Newsom and Becerra’s stated preference for a negotiated resolution as an example of that pattern.
The article, however, underscores that California’s political leadership cannot single-handedly dictate the outcome, since 11 other attorneys general from states such as New York, Colorado and Arizona have joined the case, meaning any California retreat would not automatically remove the broader coalition or end the litigation.[3][4][8][10]
At the same time, the column highlights Rob Bonta’s refusal to back down, quoting public statements that characterize Paramount’s relocation threats as “blackmail” and noting that high-profile antitrust actions can serve as political stepping stones for attorneys general with ambitions for higher office.
Ultimately, the piece suggests that, because the complaint is tightly drafted and leaves limited room for compromise, the merger is unlikely to escape without substantial concessions that the attorneys general can claim as victories, and it is equally unlikely that Ellison can simply muscle California into submission given the multistate nature of the case and the courts’ willingness so far to pause the deal.[1][4][8]
Different views on the topic
In contrast to the article’s skepticism, the U.S. Department of Justice’s Antitrust Division has publicly concluded that the Paramount–Warner Bros. Discovery merger is “unlikely to harm competition or consumers” and has said the transaction would increase competition across the media and entertainment ecosystem, benefiting American consumers and workers.[12][13]
Echoing that federal stance, Paramount has issued statements asserting that the state attorneys general’s complaint “distorts settled antitrust law,” misrepresents the realities of competition in the entertainment industry, and represents a “fundamentally flawed application” of antitrust principles that, in practice, protects dominant streaming platforms and large technology companies from new rivals.[11]
Supporters of the merger point to decisions by foreign regulators, including the U.K.’s Competition and Markets Authority and regulators in the European Union and other jurisdictions, which have approved the deal after review and found that the combined entity would continue to face substantial competition from studios such as Disney, Universal and Sony and from numerous streaming services, directly challenging the states’ claims of harmful concentration.[6][11]
Some media commentators have argued that the states’ lawsuit is driven more by politics than by economics, describing the multistate action as a Democratic-led effort to block a deal supported by President Trump and raising concern that targeting a transaction affecting CNN and other news outlets could infringe First Amendment protections and create a troubling precedent for government interference in the press.[2][10]
Additionally, several analysts and industry observers have suggested that, while the lawsuit may delay the deal and impose significant costs on Paramount, it is unlikely to permanently stop the merger, framing the case as a symbolic and politically resonant move rather than a likely death blow to the transaction.[4][10]
Pro-merger voices within the industry argue that combining Paramount and Warner Bros. Discovery is necessary to create a stronger competitor to dominant streaming services such as Netflix and major rivals like Disney, contending that blocking the deal would entrench the power of these incumbents and undermine efforts by legacy studios to adapt to a rapidly changing media landscape.[3][11][12]
Some antitrust-focused commentary further notes that the states’ complaint concentrates on specific markets—wide-release theatrical films, anticipated top-grossing films, and cable affiliate fees—while omitting direct claims about news consolidation, suggesting the case may be vulnerable to the argument that overall competition in the broader media and streaming sectors remains robust despite the proposed merger.[2][4][8]
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