Democratic States Cave on Paramount Merger Lawsuit in Win for Billionaire Owners

A coalition of Democratic states and Paramount reached a settlement in a lawsuit against its proposed $111 billion merger with Warner Bros. Discovery on Monday, paving the way for one of the largest media mergers in history — and a massive consolidation of power over a huge swath of the entertainment and news industries under the conservative billionaire Ellison family.

The antitrust lawsuit was the last major obstacle for the deal, which has already been blessed by the Trump administration. Attorneys general from 12 states had sued to block the merger, which leading California Attorney General Rob Bonta had called “unlawful,” amid a flurry of antitrust concerns from prominent Hollywood figures and press freedom groups. The Writers Guild of America’s (WGA) lawsuit against the merger was also settled on Monday, with the union saying that its members could not afford to continue the legal battle on their own.

The merger will grant widespread power to a company that would effectively control CNN; CBS News; and, in all, roughly 30 percent of wide-release theatrical film distribution and basic cable channel licensing. It amounts to roughly 20 percent of Americans’ television watching time — all conglomerated under the leadership of Paramount Skydance CEO David Ellison. David Ellison is a major ally to Trump and son of Oracle CEO Larry Ellison, who has personally donated millions to Israel’s military; Paramount had once dubiously suggested that opposition to the merger was a result of antisemitism.

David Ellison, who thanked California Gov. Gavin Newsom (D) in his statement celebrating the deal, has said that the merger is expected to go through in two weeks. Pro-Israel David Zaslav, the president of Warner Brothers Discovery — an entity that’s a conglomerate on its own, formed as a result of several other contentious mergers — is slated to receive $660 million from the merger, which would likely make him a billionaire.

Under the settlement, the newly formed megacorporation will be obligated to comply with several provisions, including the theatrical release of 30 films a year (something Paramount already independently pledged to do last year); a requirement for separate negotiations for cable channel distribution; management of two historic production lots; and an apparent commitment to domestic filmmaking.

The deal also includes a supposed commitment to a “News Editorial Independence Board” for the management of CNN and CBS, which will comprise of former or current journalists who are hand-picked by the conglomerate’s board of directors. News analysts and advocates have already cast doubt on the idea that the board will be effective, however, as past efforts to form similar such structures have failed.

David Ellison has already demonstrated a willingness to steer the news toward the right wing in his appointment of right-wing media figure Bari Weiss as CBS’s editor-in-chief last year. Meanwhile, press freedom advocates on Monday also urged David Ellison to oppose Trump’s recent ban on CNN in the press pool, noting his silence on the issue despite his stated commitments to press freedom.

Some of the world’s most repressive regimes will have a say at the company, too. The settlement comes just days after the Federal Communications Commission approved Paramount Skydance’s plan to allow the sovereign wealth funds of Saudi Arabia, Qatar, and the United Arab Emirates to have a 49.5 percent equity stake in the newly merged company.

The deal immediately faced a deluge of criticism after it was announced on Monday, with critics saying that it will have “devastating” results for the nation’s media landscape and press freedom at a time of massive repression under the Trump administration.

“Today, billionaires have yet again bribed, censored, and bullied their way to the top,” said Alvaro Bedoya, a senior advisor for the American Economic Liberties Project. “As a result, a billionaire media conglomerate closely allied with the president will soon own one of its closest rivals, including some of the nation’s most critical news outlets.”

Over 5,000 filmmakers, documentarians, and other movie and television professionals signed a letter in April stating their opposition, including prominent directors and actors, under the umbrella of a group called the Block the Merger coalition. The coalition said that their members “vehemently oppose” the agreement on Monday.

“This is a bad deal for the future of film, entertainment, independent journalism, and a strong democracy in this country,” the group said. “We are disappointed and angry that the interests of average Americans have been trampled to benefit oligarch billionaires.”

The settlement comes despite experts saying that the states had a chance at blocking the merger, having secured a pause by a judge earlier this year.

“The Paramount/Warner Brothers merger seems facially illegal,” said Lina Khan, former Federal Trade Commission chair and leading antitrust expert, in a statement on Sunday. Khan noted that the lawsuit against it was strong, meaning it had a chance of succeeding.

However, she said, “[i]t’s troubling to hear that the states may now settle for behavioral remedies, allowing the deal to go through subject to various promises from the firms. Behavioral remedies routinely fail, and the stakes here are particularly high given that a strong democracy requires open markets for sound journalism and creative expression.”