Outside the New York Attorney General’s Office, about 20 opponents of the Paramount Skydance-Warner Bros. Discovery merger gathered Monday to urge Letitia James not to settle the states’ legal challenge to the deal.
Holding signs reading “#BlockTheMerger,” the protesters — led by members of the Committee for the First Amendment — a free-speech advocacy group headed by actor Jane Fonda — called on James to “stay strong” and resist making concessions in negotiations with Paramount.
But their appeal may have come too late. As the rally wrapped up, reports circulated that a possible settlement agreement between Paramount and the 12 states suing to block the $110 billion merger had been reached.
Not long after, the California Attorney General’s Office announced a deal resolving the legal challenge, clearing a key hurdle for the transaction. The terms of the settlement include a pledge by the company to release 30 films per year for the first two years of the deal, followed by 32 films in each of the following three years — or pay a fee for missing that target. Paramount is also pledging to establish independent editorial boards overseeing the operations of CNN and CBS News.
The states, which include New York and California, had argued in a 38-page complaint filed in July that the deal would “extinguish competition” in Hollywood. Paramount, led by CEO David Ellison, has repeatedly maintained that the deal is “lawful, pro-competitive, and will benefit consumers, creators, workers, and the entertainment industry.”
The rally was one of three planned merger opposition events — one was held in Oakland outside California Attorney General Rob Bonta’s office on Sunday, and an additional rally is scheduled to take place in Los Angeles on Tuesday outside the Writers Guild of America office.
“We just want to thank everyone for listening, we want people to spread the word and let everyone know: This merger is bad,” said Bruce Cohen, a producer who was among the rally attendees and speakers on Monday. “It’s bad for Hollywood, it’s bad for workers, it’s bad for democracy.”
Paramount executives have been eager to wrap up the deal as soon as possible, partly because the company agreed to pay Warner Bros. shareholders a “ticking fee” of 25 cents a share each quarter if the transaction does not close by Sept. 30 — a penalty worth more than $600 million every three months.
In August, Paramount’s lawyers asked Judge Araceli Martínez-Olguín of the U.S. District Court for the Northern District of California, who is presiding over the case, to require the merger’s legal opponents, which also include the WGA, to put up nearly $1.9 billion. The money, the company said, would cover the costs of delays caused by the antitrust lawsuit.
The Justice Department threw its support behind Paramount’s demand that the opponents should be forced to post a bond as the price of continuing to block the merger. Martínez-Olguín had scheduled a hearing on Paramount’s bond request for Sept. 24.
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Ellison had threatened to move Paramount out of its traditional headquarters in California unless Bonta opened settlement talks, according to a source who was in a closed-door meeting last month but wasn’t authorized to speak about it on the record.
Paramount has already received regulatory clearance from the Justice Department, and it has touted similar approvals from other foreign territories, including Australia, China and the European Union. The merger also has the backing of AMC Theatres and Regal Cinemas, the largest movie theater chains in the U.S. by number of locations and screens.
But many outspoken actors, writers and producers in Hollywood have continued to rally behind efforts to block the merger, arguing in an open letter earlier this year that further corporate consolidation of the entertainment industry will “threaten the sustainability of the entire creative community.”
Ellison has pledged that the combined company will release 30 movies a year theatrically.
Brian Hansbury, a member of the actors’ union SAG-AFTRA who was at the rally Monday, expressed skepticism over the promise.
“I don’t believe that. I mean, why should we believe any major businessperson who buys things up for profit and then says that it’s going to increase the quality of the product?” he said.
“It will lead to layoffs,” he added. “It will lead to probably less production overall, which will impact every type of worker in the industry ... any piece of art and culture will be negatively affected.”
Also on Monday, the writers guild announced it had settled its lawsuit with Paramount. The union, which is made up of over 21,000 members, said in a statement that it is still opposed to the deal, but after the states moved to drop their case, it had to “contend with the reality of forging ahead alone.”
Connecticut Attorney General William Tong, who was among those negotiating with Paramount, also expressed disappointment with the terms.
As part of the agreement, Paramount is pledging to establish independent editorial boards overseeing the operations of CNN and CBS News.
However, Tong said, “Connecticut wanted and demanded full divestiture of CNN and CBS News.”
“We wanted to save ethical and independent journalism and news. We fought aggressively for that remedy,” he added. “I am deeply disappointed that we could not do more. The complete abdication of the federal government’s enforcement role in this fight left states with one arm tied behind our backs.”
