Trump administration approves merger between Paramount and Warner Bros
The Trump administration gave the green light for Paramount Skydance to acquire Warner Bros. Discovery in a megamerger that will reshape Hollywood.
The approval granted Friday afternoon by the Department of Justice, while expected, was a key step in Paramount's quest to acquire CNN, HBO, the Warner Bros. film studio and Warner Bros.' and other Warner Bros. assets. Discovery.
The Department of Justice said in a statement that "the transaction is not likely to result in harm to competition or to American consumers, including with respect to: (1) streaming video on demand ("SVOD"); (2) linear television; and (3) development, production or distribution of motion pictures by studios for theatrical exhibition."
Paramount said it was grateful to the Department of Justice for its "thorough review" and added: "We remain focused on completing the transaction as quickly as possible and delivering its benefits to consumers, creators and the entertainment industry as a whole."
Paramount and Warner Bros. Discovery (also known as WBD) still faces a potential lawsuit from a coalition of state attorneys general who say the Trump administration is not enforcing antitrust laws.
State-level legal action could slow the merger process, although Paramount executives say such action would be unfounded.
A spokesman for California Attorney General Rob Bonta said, in response to the Justice Department's decision, that "the merger between Warner Bros. and Paramount remains under investigation by the California Department of Justice."
Senator Elizabeth Warren, one of the deal's most vocal critics, called the Justice Department's approval "bad news for all Americans who don't want Trump-aligned billionaires to control what they watch and how much they pay" and urged state attorneys general to intervene.
"The agreement between Paramount and Warner Bros. reeks of corruption and influence peddling," said the senator. "This fight is not over. State attorneys general must block this merger."
Companies also continue to await important analyzes from the European Union and the United Kingdom. Regulators in these countries are evaluating whether the agreement could harm competition.
Paramount says the deal is "fundamentally pro-competition." Regarding the prospect of taking control of CNN, which has caused concern among press freedom groups, the company states that it is committed to "investing in the future of journalism, not harming it."
Paramount has sought to obtain all necessary approvals and take control of WBD in the third quarter of the year, that is, by the end of September. Internally, Paramount leaders have been talking about the possibility of clearing all the hurdles in July, although the timing of European reviews makes that unlikely.
The bold bid for WBD - which is many times larger than Paramount - has been a source of controversy for months, in part due to Paramount's close ties to President Donald Trump and the company's perceived efforts to win favor with his administration.
The deal is financed by Trump ally Larry Ellison, the billionaire co-founder of Oracle whose son, David Ellison, became CEO of Paramount through a merger last year.
Critics of the WBD deal have pointed to Paramount's restructuring of CBS News and programs like "60 Minutes" -- long the target of Trump's ire -- as evidence of the company's willingness to bow to political pressure.
Bruce Springsteen criticized Paramount for appeasing Trump on the company's flagship network, CBS, during one of the final episodes of "The Late Show with Stephen Colbert" last month. After criticizing Trump, Springsteen said: "Larry and David Ellison think they have to suck up to him to get what they want."
Paramount executives privately rejected this narrative, although the Ellisons have said little about the matter in public.
Trump has commented publicly on Paramount over time, sometimes portraying the Ellisons as his friends and specifically expressing interest in the family taking over CNN.
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"It is imperative that CNN be sold," Trump said in December, as Netflix was winning a complex bidding war for the assets. Comments indicated he preferred Paramount's hostile takeover bid.
Paramount emerged victorious in February, and the regulatory review process began.
In late April, Paramount hosted an unusual dinner in Washington with Trump, members of his cabinet and a small group of CBS News journalists and executives. Guests included: the head of the Department of Justice, Acting Attorney General Todd Blanche, and FCC Chairman Brendan Carr.
In May, the Justice Department's review of the deal moved quickly, with testimony from some Paramount executives and a lengthy meeting with David Ellison.
The interrogation was conducted by career officials, not Trump appointees, a person familiar with the process told CNN.
Still, the entire regulatory analysis was clouded by accusations of political favoritism and nepotism. Several Democratic lawmakers have promised to investigate issues related to Paramount and Trump if their party wins the midterm elections.
"We appreciate the Department of Justice's thorough review of this transaction, as well as the work of the other agencies that have completed their reviews and granted approval to date," Paramount said Friday. "This agreement is pro-competitive, resulting in a stronger company better positioned to compete against dominant technology platforms in a sector increasingly marked by intense competition for audiences, talent, technology and investment."
Source: CNN