Groups: Cable condition won’t prevent higher prices
The settlement requires the post-merger entity to conduct separate negotiations for the licensing of basic cable channels owned by Paramount and Warner Bros. Bonta’s office said the condition, which lasts for five years, would “preserv[e] the existing competitive dynamic between the companies” and help “keep prices down for consumers.” This provision does not apply to premium cable channels, streaming services, and broadcast content.
The free speech and media groups’ filing said this means “the Combined Entity still would be free to use its power in other offerings—a combined HBO and Showtime (premium cable channels), a combined HBO Max and Paramount Plus (streaming services), and CBS (broadcast)—to extract higher prices in basic cable negotiations, as this form of leveraging is carved out.” The negotiation provision also doesn’t resolve the states’ allegation that combining the companies’ cable portfolios would lead to reduced investment in basic cable channels, the filing said.
Bonta defended the settlement by saying it will guarantee “massive investment in domestic film production and provid[e] enforceable guardrails to help keep cable prices competitive.” He said the deal “is not a vote of support for this merger. But we believe this settlement, which resolves our antitrust concerns in every market alleged in our case, protects competition and consumer choice, and puts workers’ needs, concerns, and futures first, is the best course of action.”
The Writers Guild of America reluctantly settled its own lawsuit against the merger after learning of the agreement with California. The Writers Guild said its settlement prohibits writer layoffs in the CBS News broadcast division for five years and requires $17.5 million in payments to the group’s health fund.
“We continue to believe the merger will cause damage to writers and the industry at large,” the Writers Guild said. “Now that the attorneys general have settled with Paramount, however, as a nonprofit, the WGA must contend with the reality of forging ahead alone, with no backing from government enforcers, with a complex antitrust lawsuit that would cost millions of dollars to pursue through trial.”
A Bloomberg article said the Paramount/California deal was initially opposed by Massachusetts, New York, Connecticut, and Minnesota. But attorneys general in those states reportedly “concluded the expense of the legal battle was not justifiable without California at the helm.”