California Governor Gavin Newsom has maintained a notable silence regarding the lawsuit filed by Attorney General Rob Bonta and a coalition of 11 other states to block the proposed $110 billion acquisition of Warner Bros. Discovery by Paramount. The legal action has effectively paused the merger, yet Newsom has not publicly stated his position on the deal, which many in Hollywood view as a significant threat to the state's entertainment industry.
Sources close to the governor's office suggest this lack of public comment is intentional. One source familiar with Newsom's thinking indicated that the governor does not typically endorse issues he does not fully support and may be seeking to avoid additional controversy. Another informed source stated that Newsom does not perceive the merger as a detrimental deal and believes proponents have downplayed its potential negative impacts.
This source also noted that Newsom was reportedly caught off guard by the timing of Bonta's antitrust lawsuit, filed on July 13. The lawsuit has since garnered support from the Writers Guild of America. A third individual within Newsom's inner circle questioned the legal strength of the antitrust case, suggesting Newsom, who dislikes losing, would likely refrain from supporting arguments he believes are unlikely to succeed.
As Newsom approaches the end of his gubernatorial term in January and prepares for a potential presidential run, he appears to be strategically allocating his political capital. This selective approach was also evident in May when he reportedly declined to endorse Democratic candidates in the state's gubernatorial primary, risking alienation of some long-term donors.
Newsom's most extensive public remarks on the merger came in June during an appearance on journalist Aaron Parnas's substack podcast. At that time, he stated, "We believe in a fair independent process of evaluating the merits and demerits of this merger." He also raised questions about concentrated influence in media, asking, "What does it mean when you have a handful of people who have a disproportionate influence on what we see and when we see it including on Tik Tok?" He then pivoted to criticizing former President Trump, stating that "crony capitalism and state capitalism need to be scrutinized by the feds first but also by the states."
An additional factor influencing Newsom's stance may be his relationship with the Ellison family, who are largely financing the acquisition through David Ellison's Skydance. Newsom and David Ellison reportedly have a positive relationship, having met twice in the past year. However, Larry Ellison, David's father and co-founder of Oracle, has a critical view of Newsom and moved Oracle's headquarters from California to Texas.
Reports suggest that Paramount Skydance leadership is considering relocating their company outside of California if Bonta's lawsuit proceeds, a prospect that could carry economic implications for the state.
The upcoming November ballot measure, known as the "billionaire's tax," which proposes a one-time 5% wealth tax on resident billionaires, adds another layer of complexity. Newsom has publicly opposed this measure, although he supports a similar federal tax. According to sources, the optics of the state blocking the Paramount deal while simultaneously enacting a billionaire's tax could be unfavorable for Newsom's presidential aspirations.
While Newsom remains on the sidelines, other prominent figures and organizations have voiced their opinions. Former President Trump supports the deal, while actors like Joaquin Phoenix, Kristen Stewart, Florence Pugh, and directors such as David Fincher and Denis Villeneuve, along with numerous writers and actors, have signed petitions opposing it. Major Hollywood guilds and the mayors of Los Angeles and New York have also expressed opposition.