California AG Rob Bonta has caved to what was a relentless, bipartisan pressure campaign to settle the 12 state antitrust lawsuit against Paramount. The AGs sued Paramount last July, arguing (correctly) that the $111 billion deal would largely be anti-competitive, resulting in mass layoffs as the even bigger Larry Ellison-owned company forces labor and consumers to pay down the deal’s mammoth debt load.
The final settlement language hasn’t been made public, but a Bloomberg report indicates there’s not much to it. It will feature some sort of board that will purportedly try and keep CNN from going the same direction as CBS under Bari Weiss (good luck), and some language holding Paramount’s feet to the fire in terms of its promise to deliver 30 traditional big studio releases per year.
It doesn’t sound like Paramount will be forced to sell any assets or provide labor promises of any kind.
Reports suggest that at least 4 of the state AGs weren’t exactly thrilled with the idea of settling. It also sounds like California Governor Gavin Newsom was a key player in pushing for a settlement:
“Golden State Governor Gavin Newsom, who has been advocating for a settlement publicly over the past month, was in “constant contact” with the parties as talks ebbed and flowed over the weekend. Very much aware of the harsh backlash to a settlement that erupted among Congressional Democrats, A-listers like Mark Ruffalo and others as deal talks accelerated, potential 2028 POTUS candidate Newsom is said to have cautioned both sides to find terms that addressed “core concerns” for Hollywood and the state.
“It’s jobs, job, jobs, that’s what this all about,” a source close to power players in Sacramento told Deadline.”
Generally conditions don’t mean much, aren’t permanent, and aren’t consistently enforced. They don’t do much of anything to combat the larger trend of media consolidation; particularly at the hands of autocrats who have taken a hatchet to regulatory autonomy and state authority via the courts as they look to dominate media and supplant journalism with propaganda.
Consumer and media watchdog groups like Free Press were not impressed by Bonta’s decision to fold:
“These minor concessions are largely unenforceable behavioral remedies that Bonta had previously denounced, and in some cases promise less than the two companies are already doing as standalone competitors. They came after Paramount owner David Ellison made multiple threats to move the studio out of California unless the attorneys general dropped their lawsuit. Previously, Bonta had maintained he’d only accept structural remedies, which block the merger or involve companies selling off significant parts of the combined businesses.”
Bonta and Newsom were intimidated by Ellison’s threat that he would move Paramount out of Hollywood if states tried to enforce antitrust law. Though that’s the thing about antitrust enforcement: if you actually enforce antitrust law — and ensure markets are heavily populated with small to mid-sized competitors — they lack the kind of consolidated power to make those kinds of threats.
What happens next? Well, the same thing that always happens. The deal moves forward, then Paramount will begin forcing labor, creatives, and consumers to pay down the massive debt load in the form of massive layoffs, higher prices, and the kind of corner cutting that results in lower quality product. This is literally what happens every single time a deal like this is approved. There’s not really any debate.
Once the layoffs come en masse the folks, like Newsom, who advocated for a settlement, will suddenly be nowhere to be found. Again, we know this because this is what always happens. There are literally fifty years of indisputable evidence that these deals always end badly for markets, consumers, and labor. And the dysfunction is frequently infuriatingly bipartisan.
In addition to the antitrust angle, this was an opportunity for Democrats to try and kick back against the right wing effort to dominate media for propaganda purposes. But Democrats generally have proven to be feckless and pathetic when it comes to both media reform generally, and fighting right wing information warfare specifically.
If there’s a positive note for the whole thing (and assuming you ignore all the human carnage that’s coming), there’s very little indication that Paramount executives and the Ellisons have any earthly idea what they’re doing; Bari Weiss’ makeover of CBS continues to be a disaster, and there’s endless financial and logistical minefields awaiting the Ellisons just over the horizon.
It remains very possible that this company simply won’t survive the evolutionary market challenges it faces in the social media era. Every single time Warner Brothers mergers it results in mass layoffs, higher prices, shittier product, and a lot of whimpering before the acquiring company gives up entirely (see: AT&T). There’s no reason to believe this time will be any different.