.png)
The judge overseeing the antitrust case filed by 12 state attorneys general seeking to block the Paramount-Warner Bros. Discovery merger questioned the parties about their settlement at a hearing Thursday.
U.S. District Judge Araceli Martínez-Olguín has not yet ruled on whether to approve the proposed settlement, and set the virtual hearing to cover “outstanding questions” about it. She did not indicate when she might issue a ruling, saying that would be coming in “due course.”
The judge asked the parties to submit a reply to a letter sent to the court by Sen. Cory Booker (D-N.J.), by noon PT Monday, Sept. 28.
Booker sent a letter to the court seeking a ruling to halt to the Paramount-WBD merger, saying he was writing “to urge the Court to subject the proposed consent decree to an independent public-interest review before entering it.”
Unlike a federal antitrust consent judgment, the Paramount-state AGs settlement “has reached the Court without a competitive impact statement, without a public comment period, and without any formal opportunity for theaters, distributors, workers, or consumers to be heard,” Booker wrote.
“The court isn’t a rubber stamp of your agreement,” Martínez-Olguín said in her prefatory remarks. “I have some questions.” The judge said she wanted to “shore up the idea that this is not something that was the result of collusion, but instead was more of an arm’s length process.”
Paula Blizzard, senior assistant attorney general for the antitrust section of the California Attorney General’s Office, averred that it was an “arm’s length process,” and an attorney for Paramount concurred.
Asked by the judge how the settlement addresses the state AGs’ case concerns over competition, Blizzard said the reasoning was that the AGs were wary about permanently blocking the Paramount-WBD deal. And she said Warner Bros. Discovery, if it were denied the deal to merge with Paramount, would likely seek another M&A partner.
“If we block the merger, it would be forever,” Blizzard said. “Sometimes we say, here are some remedies that will address the harm we see, but are not going to permanently change the structure by either completely blocking the merger or completely divestment, and this is one of those cases.” The proposed settlement covers conditions that are in effect for five years.
“We absolutely recognize that this merger has engendered a large amount of controversy and commentary and feelings and concerns on a whole host of issues,” Blizzard told the judge. “A lot of these are outside antitrust. They reflect the country’s very broad political and philosophical divides, concerns about the state of the news media, people’s relationship to big companies and consolidation and corporate power, and we hear those voices, we listen to those voices, we respect those voices. But at the end of the day, this is an antitrust case, and it is focused on the antitrust law.”
Blizzard, later in her comments to the judge, said that while the State of California is trying to protect “businesses and competition,” she said “there are some voices that carry a little less weight, and those are the ones that are threatening and are blackmailing us to say that they will pull out of California. And the reason that that voice has very little weight is that it doesn’t affect the antitrust case. This is an antitrust case.” That’s a reference to Paramount CEO David Ellison telling his senior leadership team that the company would seek to relocate elsewhere if the Warner Bros. merger was blocked.
Josh Holian of Latham & Watkins, representing Paramount, commented: “I don’t agree that anybody was blackmailing anybody.” He said “Paramount has to make business decisions about where it’s going to run its operations, but it’s business decisions. It’s not blackmail. It’s not a threat.”
Judge Martínez-Olguín asked about the condition that Paramount-WBD would be required to divest its ownership stake in Miramax Studios if the company doesn’t meet the movie-output minimum requirements. Holian, Paramount’s attorney, said that of the top 20 films at the domestic box office right now for 2026, Paramount and Warner Bros. represent three of those pictures, and noted that one of those is a Miramax movie: “Scary Movie 6.” It’s a Miramax property that is something that would be part of that divestiture package. It’s important IP. It’s an important studio for us. We do not want to divest it.”
As for the basic cable TV conditions, which would require Paramount-WBD to divest certain networks if it violates anticompetitive terms of the consent decree, Blizzard said that was similarly designed to be a deterrent to violating the consent decree. The networks the merged company would be required to divest are several BET channels, VH1, Comedy Central, Smithsonian, Destination America and Science.
Martínez-Olguín told the parties that she wants to notified of the state committee monitoring compliance with the consent decree.
Meanwhile, also before the court was the Block the Merger coalition’s motion for an emergency hearing asking Martínez-Olguín “to grant interested parties the opportunity to formally oppose the weak and unenforceable consent decree that state attorneys general entered into with Paramount on Monday.” Paramount Skydance filed a brief opposing that motion and others seeking to intervene.
In an order Thursday, Martínez-Olguín granted the administrative motions to file amicus briefs and said all amicus briefs must be filed on the docket by no later than 12:01 a.m. PT on Sept. 25.
The hearing came after the announcement Monday of Paramount’s settlement with the 12 Democratic state attorneys general, leaving only the judge’s approval of the proposed consent decree as the last checkbox needed for the Paramount-WBD merger to close. In a memo to staff, Paramount CEO David Ellison said he expected the Warner Bros. pact to close in around two weeks — assuming the settlement agreement is approved in a timely fashion.
The lawsuit filed by California Attorney General Rob Bonta and the 11 other AGs had alleged the combined Paramount-Warner Bros. would have excessive power in markets for wide-release and “tentpole” theatrical movies as well as basic cable. Previously, Bonta had asserted that only “structural” remedies (i.e., divestitures) would be sufficient to call off the lawsuit but the resulting settlement includes no such provisions.
Among the top-line terms in Paramount’s settlement with the states: Paramount is prohibited from selling the Paramount Studios or Warner Bros. lots in the state for at least five years, and is obligated to invest at least an additional $300 million on film production in the U.S. annually — for a total of $1.5 billion over five years. The combined Paramount-WB also must release at least 30 movies for theatrical distribution in the first two years (something Ellison has repeatedly promised he would do) and at least 32 in years 3-5, with a 45-day window for wide-release films. The merged Paramount-Warner Bros. also will be subject to monitoring by a “news editorial independence board,” which will establish “guiding editorial and journalism principles for” for CNN and CBS News.
The terms of the proposed settlement would conclude at the end of the fifth calendar year that follows the closing. That means if the Paramount-WBD merger closes before the end of this year as expected, the commitment period for the settlement would run through Dec. 31, 2031.
Separately, on Thursday Paramount announced that it would raise an additional $7.5 billion in debt through a proposed senior secured incremental tranche of term “B” loans to help fund the WBD takeover and to pay down certain other debt. In total, Paramount said it now intends to raise approximately $44.4 billion of additional secured debt, in addition to previously announced financings.
English (US) ·