Netflix originally had a deal to buy Warner Bros. but backed out after it became clear the Trump administration preferred Paramount. Paramount CEO David Ellison reportedly wooed Trump administration officials with a promise to make big changes at the Warner-owned CNN.
Trump’s Justice Department approved the deal in June. The Federal Communications Commission last week allowed Paramount to finance the merger by selling large equity stakes to the sovereign wealth funds of Saudi Arabia, the United Arab Emirates, and Qatar.
States’ lawsuit was going well
Twelve states led by California sued to block the deal in July and were able to delay the merger’s completion when a federal judge ruled that the combination would likely reduce competition substantially and violate antitrust laws. The deal will let Paramount combine two of the largest movie studios, merge streaming service Paramount+ with HBO Max, and take ownership of CNN and other TV channels.
Bonta alleged in July that “the unlawful merger of these two entertainment behemoths would lead to higher prices, lower quality, and less content for film and television, harming movie theaters, basic cable distributors, and ultimately, audiences on every sofa and movie theater seat in the US.”
Democratic lawmakers who oppose the deal had been pinning their hopes on the California lawsuit. “Paramount, run by the Ellisons, should not own both CBS and CNN. California must not cave and take a deal that leaves both under the same owner,” US Rep. Ro Khanna (D-Calif.) wrote Saturday.
US Rep Jamie Raskin (D-Md.) urged state attorneys general to “hang tough” against the merger. “At a time of massive economic concentration, accelerating monopoly and growing MAGA political capture of America’s media institutions, we need the state AGs to vigorously defend antitrust principles and freedom of expression,” he wrote.