California Attorney General Rob Bonta stated that Paramount's acquisition of Warner Bros. Discovery would require significant concessions to overcome antitrust objections. Bonta, leading a group of 12 state attorneys general, indicated that Paramount's owner, David Ellison, would need to provide "robust structural remedies" to address concerns about the potential market dominance of the combined entity.
In an interview, Bonta specified that the proposed remedies must focus on the anticompetitive risks outlined in the lawsuit, particularly the concern that the merged company could control one-third of films and nearly a third of cable TV programming. He noted that Paramount's discussions have veered toward topics not central to the complaint, such as the streaming market or CNN's operations, and discussions with foreign regulators.
"We do prefer to resolve cases in the boardroom instead of the courtroom, but for now we’re bringing our case," Bonta said, emphasizing a preference for settlement but insisting it must address the core allegations. He added that if Ellison and Paramount wish to negotiate in good faith, his office is open to conversation.
Paramount is reportedly eager to settle as a deadline approaches. A lengthy legal battle could impose a daily "ticking fee" of $7 million on Paramount until the deal is finalized. The deal, valued at $110 billion, would consolidate brands like HBO Max, Paramount+, HBO, CBS, and CNN, along with extensive film libraries, under Ellison's leadership. Ellison is the son of Oracle billionaire and political ally of former President Donald Trump, Larry Ellison.
The July 13 complaint filed by the state attorneys general alleges that the new conglomerate would dominate the market for movies grossing over $100 million at the box office, which could harm competition, stifle creativity, reduce content diversity, and lead to higher prices for consumers and film workers. The lawsuit argues that competition between Paramount and Warner Bros. is crucial for incentivizing quality filmmaking and securing fair terms for theaters and audiences.
However, the nation's three largest movie theater chains—AMC, Regal, and Cinemark—have publicly supported the Paramount deal. This shift followed concessions from Ellison, including a commitment to produce 30 films theatrically per year and maintain an exclusive theatrical window of 45 days for at least three years. Bonta acknowledged that the theater chains' request for protections is not unreasonable, even with the merger potentially moving forward.
Bonta dismissed arguments that a shrinking cable TV market mitigates anticompetitive risks, stating that market size is irrelevant to the legal framework. He described the case as a "straight-up, meat-and-potatoes, black-and-white, bread-and-butter antitrust case" based on U.S. law, specifically Section 7 of the Clayton Act.
Paramount has consistently defended the merger, highlighting approvals from the U.S. Department of Justice and regulators in the European Union, United Kingdom, Australia, and China. During an August earnings call, Ellison expressed confidence that the deal would be completed. A judge recently set a trial date for March 2027, a later date than Paramount had sought. If a settlement is not reached by October 1, the daily "ticking fee" will commence. There have also been reports that Ellison is considering relocating Hollywood studios and CBS News headquarters out of California and New York, respectively, potentially as leverage in negotiations.