A judge on Friday declined to rule on California’s request for a temporary restraining order freezing Paramount’s operations. planned buyout from Warner Bros. Discovery (WBD)
Paramount CEO David Ellison is seeking to acquire WBD in a $111 billion deal expected to close in the third quarter of this year, but California’s attorney general Rob Bonta leads a group of 12 state attorneys general who filed a lawsuit challenging the merger. The lawsuit claims the mega-deal would “lead to higher prices, lower quality, and less content for film and television, harming movie theaters, basic cable providers, and ultimately the audiences sitting on every couch and movie theater seat in the United States.”
The suit, filed in the U.S. District Court for the Northern District of California, claims the merger violates Section 7 of the Clayton Act, which states that mergers that would substantially lessen competition or tend to create a monopoly are unlawful.
PARAMOUNT ADVISORS PUSH FOR CALIFORNIA EXIT AS STATE SUES TO BLOCK WARNER BROS DISCOVERY MERGER: REPORT
California Attorney General Rob Bonta believes the Warner Bros. takeover plan Discovery by Paramount is “an illegal merger.” (AaronP/Bauer-Griffin/GC Images / Getty Images)
A TRO hearing Friday focused on antitrust law, with Paramount arguing the merger would actually increase competition, while the state insists merging two major Hollywood studios would hurt the industry while giving the company too much power.
District Judge Araceli Martínez-Olguín promised to issue her decision by July 22.
Paramount is seeking to move forward as quickly as possible to avoid exorbitant ticking fees, the term for fees that accumulate the longer the merger is delayed. Journalists were prohibited from taking photos or videos of the hearing.
WARNER BROS DISCOVERY SHAREHOLDERS APPROVE PARAMOUNT SKYDANCE DEAL
California Attorney General Rob Bonta. (Sarah Reingewirtz/MediaNews Group/Los Angeles Daily News via Getty Images / Getty Images)
The Ministry of Justice (DOJ) announced last week that it had closed its antitrust investigation into Paramount Skydance’s proposed acquisition of WBD, concluding that the transaction is not likely to harm competition or American consumers.
The Antitrust Division said its eight-month review reviewed more than two million documents and concluded the deal could strengthen competition around the world. media and entertainment industry, particularly in streaming video, traditional television and theatrical film distribution. However, state attorneys general retain independent authority under antitrust laws.
Ellison, the son of the billionaire co-founder of Oracle Larry Ellisontook control of Paramount last year when Skydance Media and Paramount Global completed an $8 billion merger. Adding WBD to his portfolio would make the younger Ellison one of the most powerful people in Hollywood.
CALIFORNIA AG DECLARES PARAMOUNT-WBD MERGER AS “ILLEGAL,” SAYS THREAT TO LEAVE STATE IS “BLACK MAIL” EFFORT
David Ellison, CEO of Paramount. (Charly Triballeau/AFP via Getty Images / Getty Images)
Paramount fired back Monday shortly after the suit was filed, saying the lawsuit “reflects a fundamentally misapplication of the antitrust laws and is erroneous on both the facts and the law.”
“We will vigorously defend the transaction and demonstrate that this challenge is inconsistent with sound competition policy and the competitive realities of the media marketplace. Delaying this transaction will only harm entertainment workers who have already suffered in recent years as technology has disrupted their livelihoods and cost tens of thousands of entertainment jobs in California,” a Paramount spokesperson said in a statement to Fox News Digital.
“The combination of Paramount and WBD will create a stronger, well-capitalized, creative-focused media company better positioned to compete with companies like Netflix that have come to dominate the industry in terms of viewership, premium content and creative talent,” the spokesperson continued. “Simply put, any attempt to block this transaction undermines the very principles that antitrust law is supposed to promote: more competition, more choice for consumers, and more opportunity for creators and workers.”
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