A New Bipartisan Bill Promises Innovation and Choice. It Will Deliver Neither.

The battle to prevent a major Hollywood merger is still ongoing, despite recent developments that suggest the deal might be nearing completion. Last week, the Justice Department gave its approval to the proposed $110 billion merger between Paramount and Warner Bros. Discovery, which would combine two iconic film studios, two prominent streaming services, and extensive broadcasting and cable networks under the control of David Ellison, CEO of Paramount Skydance. Ellison, a 43-year-old media executive and son of Oracle co-founder Larry Ellison, aims to reshape the entertainment landscape by integrating the operations of CBS News and CNN, as well as revamping segments of the Tiffany Network’s news divisions.

Despite the federal government’s endorsement, California Attorney General Rob Bonta has emphasized that the merger is not yet finalized and remains under active investigation by his office. Bonta’s stance reflects growing concerns among state officials about the implications of consolidating such powerful entities in the entertainment sector. New York Attorney General Letitia James is also reportedly looking into the deal, with additional states potentially joining the effort to challenge the merger. According to Scott Wagner, co-head of antitrust practice at law firm Bilzin Sumberg, state attorneys general possess the authority to initiate legal actions independently, even if federal regulators do not intervene. This means that the outcome of the merger could hinge on the decisions made by these state-level officials.

The merger has drawn criticism from numerous Hollywood professionals, including over 5,500 actors, directors, producers, and screenwriters who signed an open letter opposing the deal. They argue that the consolidation would reduce the number of buyers for film and television content, decrease job opportunities, and increase consumer costs. Notable figures such as J.J. Abrams, Bryan Cranston, Jane Fonda, Pedro Pascal, and Ben Stiller have voiced their support for the efforts being taken by Bonta and his peers to scrutinize the merger and consider legal action to block it. Their concerns center around preserving competition, protecting employment, and ensuring a thriving future for the entertainment industry and American culture.

Advocacy groups like Free Press have also weighed in, emphasizing that state attorneys general have a compelling case for blocking the merger. They highlight the warnings issued by journalists, filmmakers, and workers in the entertainment industry regarding the potential consequences of the deal. Free Press co-CEO Craig Aaron stressed the importance of heeding these concerns, stating that the potential harms of the merger should not be ignored.

Paramount has consistently defended the merger, asserting that it is pro-competitive and would create a stronger entity better equipped to compete against dominant technology platforms. In response to the Justice Department’s approval, Paramount reiterated its position, claiming that the merger would enhance competition in an industry marked by fierce rivalry for audiences, talent, technology, and investment. Additionally, Ellison has sought to reassure Hollywood’s creative community by pledging to release 30 films annually in theaters.

While the federal government appears satisfied with the merger, the situation remains fluid due to the possibility of legal challenges from state attorneys general. The involvement of multiple states in investigating the deal suggests that the path to finalizing the merger could be complicated by potential litigation. As the debate continues, the ultimate fate of the merger will depend on how effectively state officials can mount their opposition and whether they succeed in persuading courts to block the transaction.