Paramount Reaches Settlement With California, Paving the Way for Warner Bros. Discovery Deal To Close

Paramount has reached a settlement to resolve a lawsuit brought by California and 11 other states that sought to block the storied company’s roughly $110 billion merger with Warner Bros. Discovery.The settlement comes just over a week before a key deadline for Paramount, September 30, when the company would start to face a fine of $7 million for each day the deal was delayed. The storied studio said those fees could add up to as much as $1.88 billion. On Monday, California’s attorney general, Rob Bonta, cast the settlement as an “in between deal” that satisfied the states’ antitrust concerns. However, opponents of the merger criticized the deal as they noted that settlement did not include major concessions from Paramount, such as a requirement to sell off certain cable networks, like CNN. Monday’s announcement caps off a twisty process led by Paramount’s CEO, David Ellison, the son of an Oracle co-founder and a Trump supporter, Larry Ellison, to acquire WBD. Last year, the younger Ellison launched a bid to acquire WBD. Initially, it appeared he had lost a bidding war for the studio to streaming giant Netflix. However, in February, WBD’s board determined that a revised Paramount bid was superior to Netflix’s offer. In July, Mr. Bonta, led a coalition of Democratic-led states, in trying to block the deal. The states alleged that the mega-merger — which had been approved by the Justice Department, the European Union, China, and several other countries — would limit competition and drive up prices for consumers. Mr. Bonta told reporters during a press conference on Monday that the settlement is not a “vote of support” for the merger. He said that Paramount made an “enforceable commitment” to increase its production of movies produced in America, and a commitment to release 30 movies in the first two years after the merger goes through and 32 in the following three years. In a statement, New Jersey’s attorney general, Jennifer Davenport, said that “the merged company must conduct negotiations for Paramount basic cable channels independently from negotiations for Warner Bros. basic cable channels, preserving the existing competitive dynamic between the companies.”Mr. Bonta said that Paramount “must” establish a news editorial independence board “to support CBS News’s and CNN’s continued editorial independence to ensure independent, objective, fact-based reporting.” Despite the settlement, Mr. Bonta said that he still believes that Paramount and WBD should not merge.A media advocacy organization, Free Press criticized the settlement. The co-CEO of Free Press, Jessica Gonzalez, said in a statement that it was a “sad day” for opponents of the merger. “Based on all reporters, this weak deal contains nothing but unenforceable, empty Paramount promises,” Ms. Gonzalez said. “A fake bipartisan oversight committee won’t save CNN. We have all the evidence we need from the Ellisons’ destruction of CBS about what they do to warp journalism at Donald Trump’s request.In the lead-up to the settlement, there were several reports that Paramount was considering leaving California. Politico reported last week that the company was looking at office space at Nashville. The Los Angeles Economic Development Corporation’s Institute for Applied Economics said in a report that if Paramount left California, it could lead to the “permanent loss” of up to 58,000 jobs and the economic losses of between $10.6 billion and $21.2 billion. Despite concerns about the economic ramifications of the studio leaving, some left-wing commentators suggested the states should not settle the lawsuit. The former Federal Trade Commission chairwoman, Lina Khan, said the merger “seems facially illegal,” and said she hoped the plaintiffs “keep fighting to protect this market.” Senator Elizabeth Warren called the merger “dangerous” as she raised concerns that CNN would be acquired by Paramount. The Ellisons have been seen as aligned with Mr. Trump. Last year, the Paramount CEO brought on Bari Weiss to be the editor-in-chief of CBS News. Ms. Weiss, who founded the pro-Israel and anti-woke outlet the Free Press, has overseen revamps of the Tiffany Network’s “CBS Evening News” and “60 Minutes.” Earlier this year, four “60 Minutes” correspondents — Anderson Cooper, Sharyn Alfonsi, Cecilia Vega, and Scott Pelley —and the newsmagazine program’s executive producer, Tanya Simon, departed the show. Ms. Alfonsi, Ms. Vega, and Mr. Pelley — who were fired, as opposed to Mr. Cooper, who decided not to renew his contract — have alleged that CBS News executives were interfering with their stories and trying to inject political bias, although they have not provided specific examples. CBS News executives denied that allegation of improper interference and said the “only ‘interference’ is the normal back and forth between editor and correspondent that happens in every newsroom.”The new season of “60 Minutes” kicked off on September 13, and media critics said that despite concerns the program would take a more Trump-friendly stance, the show seemed largely similar to previous iterations. CNN’s media analyst, Brian Stelter, said that there had been some “changes around the edges” but that the show was “still doing what it’s always done” and was “as strong as it ever was.”Democrats, liberal commentators, and several anonymous CNN staffers, have fretted that if the Paramount-WBD deal goes through, Mr. Ellison would make changes at CNN to make it friendlier to the Trump Administration. Mr. Ellison has repeatedly pledged that the cable network would retain its independence. In an op-ed published by the New York Times last month, Mr. Ellison suggested that concerns about the future of CNN were driving the states’ lawsuit against the WBD deal. It is unclear whether Paramount’s plan to set up a board to oversee CNN will soothe concerns about the future of the network. When the idea was floated last month, several CNN staffers told a media newsletter, Status, that they were skeptical that the board would protect their network’s independence. Paramount did not respond to The New York Sun’s request for comment by the time of publication.

Paramount Reaches Settlement With California, Paving the Way for Warner Bros. Discovery Deal To Close

Paramount Reaches Settlement With California, Paving the Way for Warner Bros. Discovery Deal To Close

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