Key Points
- Paramount and 12 state attorneys general defended their antitrust settlement Monday in separate court filings; the filings responded to objections raised last week by U.S. Senator Cory Booker of New Jersey.
- Paramount argued the settlement resolves the states’ central concern that the merger with Warner Bros Discovery could reduce theatrical film output, and said the decree creates an enforceable pipeline of new theatrical releases.
- Booker urged the court to conduct an independent public-interest review before approving the proposed consent decree.
Paramount and more than a dozen state attorneys general filed a brief with a federal court this week defending their settlement in an antitrust lawsuit over the company’s aspirations to acquire Warner Bros Discovery (WBD).
In separate filings, Paramount and the states said the settlement was vigorously negotiated and includes meaningful obligations tied the acquisition.
The filings were requested by U.S. District Judge Araceli Martínez-Olguín after Senator Cory Booker of New Jersey raised concerns about the settlement.
In a letter sent to the court last week, Booker urged the judge to approve an independent public-interest review before approving the settlement. He argued the deal does not go far enough to address potential anti-competitive harms from the merger.
Paramount pushed back on that argument, saying the decree addresses the states’ primary concern: the possibility that the combined company could reduce theatrical releases after the merger closes.
“The proposed consent decree eliminates that risk of post-merger output reductions,” Paramount’s lawyers wrote, adding that the agreement provides “a guaranteed, enforceable pipeline of new releases every year.”
Booker also questioned the five-year duration of the consent decree, arguing the settlement would leave no protections in place after the fifth year.
Paramount said the five-year term is reasonable because the film and television business continues to change quickly. Its attorneys argued that a longer term could limit the combined company’s ability to respond to shifts in consumer demand or future industry innovation.
The state attorneys general also defended the duration of the decree.
“The parties bargained for a five-year term,” the states wrote. “It reflects a balance between preserving present levels of competition, requiring additional years of oversight, and the potential alternative of Warner Bros. seeking to merge with a different competitor.”
The filings also addressed Booker’s concerns about an editorial independence board that would oversee CNN and CBS News. Booker noted that editorial issues were not part of the states’ antitrust complaint and questioned the board’s independence because Paramount would appoint its members.
Paramount said the board was structured to avoid claims of government control while still functioning independently.
“The Board was structured to be as self-executing and efficient as practicable in order to ensure independence and avoid any claims related to government-control of the Board,” Paramount’s lawyers wrote.
The states argued the board does not raise First Amendment concerns because the decree addresses the board’s structure, not its editorial decisions.
“The Decree defines the Board’s structure, not its speech, and editorial principles established by the Board will reflect private conduct,” the states wrote.
Paramount announced its interest in WBD two years ago, and ultimately beat out Netflix in an unusual bidding war for the entirety of the company. That includes WBD properties like CNN, TBS, TNT Sports, Cartoon Network, Boomerang, Warner Bros Pictures, DC Comics and Eurosport.
The deal initially drew a challenge from California Attorney Rob Bonta and several other state attorneys general, arguing that the combination of Paramount and WBD would negatively affect competition in the theatrical film, cable television and news industries.
But Bonta faced increased pressure from entertainment unions, who were persuaded by Paramount’s threats of relocating their corporate headquarters and content production studios to another state if their merger was blocked on legal grounds. Executives at Paramount were said to be scouting for office space in Tennessee, Texas, Georgia and other tax-friendly states; unions said a relocation could cost thousands of jobs in Southern California, where Paramount and WBD are presently headquartered.
A condition of the settlement reached earlier this month requires Paramount and WBD to maintain administrative offices and film production studios in California for a while longer.
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