California Governor Gavin Newsom's office has reportedly voiced concerns to Attorney General Rob Bonta, urging him to settle the state's antitrust lawsuit challenging Paramount's acquisition of Warner Bros. Discovery out of court. The governor's intervention, detailed in reports from The Wall Street Journal, introduces a division between two of California's top officials on the matter.
Newsom's office has indicated that blocking the merger could negatively impact Hollywood jobs. The governor, who is widely seen as a potential contender for the 2028 Democratic presidential nomination, is not directly involved in the lawsuit and does not have authority over the attorney general. The potential impact of his expressed concerns remains unclear.
Antitrust Concerns
The lawsuit, led by Bonta and a coalition of 12 state attorneys general, argues that the proposed $110 billion merger would harm consumers by reducing competition and leading to negative outcomes for the film and television industry. The suit contends that the combined entity, if approved, would control nearly a third of the U.S. theatrical film distribution market and a similar share of basic cable programming.
This legal challenge represents the most significant obstacle to Paramount completing its deal. The proposed merger would combine media assets including HBO Max, Paramount+, HBO, CBS, and CNN. The suit specifically highlights fears that the consolidation will intensify existing industry pressures, such as layoffs and the rise of streaming, resulting in higher prices, diminished quality, and less content for audiences.
US District Judge Araceli Martínez-Olguín is scheduled to address the states' motion for a preliminary injunction on August 3. A decision on the timing of a potential trial could have financial implications for Paramount, as a costly "ticking fee" begins to accrue if the deal is not finalized before October 1. This fee adds $7 million per day to the acquisition cost for every quarter the merger remains incomplete.
Industry Approvals and Deal Timeline
Paramount has maintained its position that the merger will be completed by the end of September, emphasizing that the deal has already received approval from the U.S. Department of Justice, as well as regulatory authorities in Australia and China. European Union regulators also granted conditional approval after Paramount agreed to specific concessions.
Any delay in the deal's finalization could also prolong uncertainty regarding the future management of CNN. Reports suggest that the network's top anchors are concerned about editorial independence, particularly following the installation of Bari Weiss to lead CBS News after a previous media merger involving David Ellison, the son of Oracle billionaire Larry Ellison, who is leading the proposed Paramount-WBD conglomerate.
Bonta's office declined to comment on the alleged conversations, stating a policy against commenting on potential or alleged discussions. A representative for Newsom did not immediately respond to a request for comment.