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California settles Paramount-Warner merger lawsuit, drawing criticism
Confirmed
In Short: California has reached a settlement with Paramount Skydance over the $110bn merger with Warner Bros Discovery, angering free speech advocates.
California and 11 other states had sued to block the merger, but a settlement was reached over the weekend.
The settlement, which will reportedly be announced later today, drew condemnation from Democrats and media advocates.
The lawsuits were brought by a coalition of 12 state attorneys general, led by California, and had delayed the merger’s completion.
The Federal Communications Commission last week allowed Paramount to finance the merger by selling large equity stakes to the sovereign wealth funds of Saudi Arabia, the United Arab Emirates, and Qatar.
The settlement allows Paramount to avoid a daily $7m fee if the merger closes by September 30.
The merger leaves fewer studios competing for scripts and talent, giving one company greater power to dictate terms to distributors and reducing streaming choices.
Democratic lawmakers who oppose the deal had been pinning their hopes on the California lawsuit.
The settlement was confirmed in a Wall Street Journal report that said the combined company is set to emerge with nearly $80 billion in debt.
What this adds
The settlement represents a hurdle to bringing the two media giants together, a deal the Trump administration had already cleared.
The lawsuits were brought by a coalition of 12 state attorneys general.
The settlement was also confirmed in a Wall Street Journal report.
Background
A California appeals court has rejected Jay-Z's attempt to revive his lawsuit against a Texas lawyer who accused him of raping a 13-year-old girl.
What's confirmed
- Paramount Skydance has reached a settlement with California and 11 other states that sued to block the $110bn merger with Warner Bros Discovery, both Reuters and Bloomberg News have reported, citing sources familiar with the matter.
What's still developing
- The lawsuit represented a hurdle to bringing the two media giants together, a deal the Trump administration had already cleared.
- But free speech advocates are not convinced that will be helpful.
- By securing concessions aimed at preserving newsroom independence and maintaining movie production, Paramount appears to have addressed some of the concerns, bringing the two companies closer to completing a merger that will create one of the world’s largest media and entertainment groups.
- Paramount did not immediately respond to Al Jazeera’s request for comment.
- “The Paramount/Warner Brothers merger seems facially illegal, and the state AG lawsuit challenging it is very strong,” Lina Khan, who chaired the Federal Trade Commission during the Biden administration, wrote yesterday.
- “Settlement talks came to fruition over the weekend after four states that had opposed terms of a deal outlined with California conceded,” Bloomberg wrote, citing a person familiar with the matter.
- Twelve states led by California sued to block the deal in July and were able to delay the merger’s completion when a federal judge ruled that the combination would likely reduce competition substantially and violate antitrust laws.
- “Paramount, run by the Ellisons, should not own both CBS and CNN. California must not cave and take a deal that leaves both under the same owner,” US Rep. Ro Khanna (D-Calif.) wrote Saturday.
- US Rep Jamie Raskin (D-Md.) urged state attorneys general to “hang tough” against the merger.
- Two members of California’s Board of Parole Hearings quietly lost their positions this summer after approving the release of convicted sex offenders touched off public outrage, a move that has drawn sharp criticism from criminal justice reform advocates.
- Privacy advocates raised alarms as California lawmakers voted to share driver license information with a national nonprofit database.
- Those demands became public last month through a lawsuit in which 22 state attorneys general, including California, sued to block the federal government from carrying out a subpoena seeking driver records.