California AG Warns Paramount-Warner Bros. Merger Could Wipe Out Competition

California Attorney General Rob Bonta is determined to challenge Paramount Skydance’s proposed $110 billion merger with Warner Bros. Discovery. He argues that this deal could consolidate too much power within a single company, adversely affecting both audiences and the broader entertainment industry.

In an opinion piece featured in Variety, Bonta revealed that he is spearheading a coalition of 12 state attorneys general in a lawsuit aimed at halting the merger. He contends that merging Paramount and Warner Bros. would diminish competition, raise prices, and restrict the diversity of movies and television shows available to viewers.

“Paramount Skydance CEO David Ellison may think the promise of the Paramount Warner Bros. Discovery mega-merger is an offer we can’t refuse, but I’m here to say: He’s wrong,” Bonta stated.

The proposed merger would unite two significant Hollywood entities, consolidating two of the five largest movie distributors and basic cable owners. Bonta argues that this new entity would dominate theatrical movie distribution, blockbuster releases, and cable networks.

Bonta emphasized that the entertainment industry transcends merely selling movies and television shows. He described films and series as vital components of daily life that can shape culture, spark discussions, and expose audiences to new perspectives.

He cautioned that concentrating so much power in one company could have severe repercussions. “Giving that much power to one media company would wipe out competition, jack up prices, hurt the quality of content we’re offered, and bring fewer movies and shows to our screens,” he wrote.

Bonta also expressed concerns regarding journalism, suggesting that merging major news operations could result in fewer journalists and limited viewpoints for the public. He believes that diminished competition could hinder opportunities for filmmakers, writers, producers, and other creators.

The attorney general pointed to Hollywood’s competitive history as a reason to oppose the merger. He cited iconic films from both companies, such as Titanic, The Godfather, The Matrix, Barbie, Harry Potter, Lord of the Rings, and Casablanca, as examples of how competition has fostered memorable projects.

Bonta argued that competition drives companies to take creative risks, invest in innovative ideas, and provide better choices for consumers. He believes that without this competitive pressure, companies may lack the motivation to produce original content or maintain fair pricing.

The lawsuit is grounded in antitrust concerns, with Bonta asserting that the merger violates laws designed to prevent excessive market power. He stated that these laws exist to protect consumers, workers, and smaller competitors from being marginalized.

Paramount has defended the merger, claiming it will lead to a more robust entertainment company. However, Bonta and other critics argue that the agreement could result in increased industry consolidation and fewer opportunities for creators.

Bonta concluded his statement by emphasizing that the lawsuit is about safeguarding competition and ensuring that large corporations adhere to the rules. “No one is. No company is,” he wrote, insisting that even the largest companies must be held accountable.

This legal battle now stands as one of the most significant challenges to the Paramount-Warner Bros. merger and could play a crucial role in shaping the future landscape of Hollywood.

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