California Attorney General Rob Bonta just shut down what had looked like the first real opening for a settlement in the fight over Paramount’s $111 billion acquisition of Warner Bros. Discovery.
The two sides were supposed to meet Monday. Instead, Bonta pulled the plug late Sunday and accused Paramount of leaking details from a preliminary session Friday and then misrepresenting what had been discussed.
California is about to push out another Hollywood studio for the same reason it caused Big Tech giants to flee: mindless left-wing politics.
The Democrat attorney general is accusing Paramount of acting in “bad faith,” which is a little like Gavin Newsom accusing others of using too much hair product.
“Not only did Paramount leak the alleged substance of settlement discussions, but they misrepresented these discussions, demonstrating a lack of good faith,” Bonta said. “As soon as Paramount stops playing games and engages sincerely, my office is happy to meet again.”
That means the 12-state coalition trying to block the merger has now cut off the most obvious route to a quick resolution.
Bonta is leading California and 11 other states in an antitrust suit arguing that the deal would concentrate too much power in theatrical movie distribution and cable television. The states say the merged company could reduce competition, raise prices, limit consumer choice and hurt workers.
Paramount says the opposite: that combining with Warner Bros. Discovery would give it enough scale to compete more aggressively with Netflix, Amazon and Disney.
The Trump Justice Department already examined that question and came down squarely on Paramount’s side.
After an eight-month investigation involving more than two million documents and more than 80 custodians, DOJ concluded in June that the transaction was “not likely to result in harm to competition or American consumers” in streaming, linear television or theatrical film production and distribution. And DOJ is hardly alone.
Paramount says the merger has now cleared regulatory review in nearly 70 jurisdictions around the world, including the United Kingdom and European Union.
So at this point, a coalition of 12 state attorneys general remains the major obstacle to one of the largest media deals in history.
Unsurprisingly, it all seems to boil down to politics. It’s not because Paramount is conservative or anything. It is simply that the left would be in danger of losing a powerful tool for propaganda: CNN.
Imagine if CNN were actually unbiased and accurately reported the news. The very thought gives left-wing activists chills.
Paramount CEO David Ellison has argued publicly that much of the hostility toward the merger is really about CNN.
Ellison wrote recently that the real question surrounding the deal is “whether I can be trusted as a steward of Warner’s CNN.”
He described himself as politically mixed and said his goal would be straightforward journalism rather than ideological control.
“I have regularly voted for candidates of both parties; I hold some views that would be called conservative and others that would be called liberal, just like most Americans,” Ellison wrote. “I believe that news should be based on facts and truth.”
That is exactly the problem for these blue state attorneys general. Paramount isn't some conservative insurgent media company. CBS isn't turning into Breitbart. Warner Bros. isn't about to start producing two-hour documentaries on Thomas Sowell.
READ MORE: Netflix-Linked Contributions Dog Dem AGs Trying to Block Paramount-Warner Deal
What Ellison is describing is basically mainstream media with some effort at ideological balance. And apparently even that is enough to create panic.
As my RedState colleague Ben Smith previously reported, the lawsuit has also attracted scrutiny because some of the attorneys general involved have financial or political ties to people associated with Netflix — one of Paramount's most obvious competitors.
California Republican attorney general nominee Michael Gates called for an investigation after campaign-finance records showed that Patty Quillin, wife of Netflix co-founder Reed Hastings, donated $1 million to Smart Justice California Action Fund in 2022. Two months later, that organization gave $150,000 to a committee supporting Bonta's campaign. Bonta's office has denied that the lawsuit was politically motivated and says it resulted from an ordinary antitrust review.
Nevada Attorney General Aaron Ford has faced separate questions involving the Attorney General Alliance, which counts Netflix among its corporate sponsors, and contributions from Netflix board member Susan Rice. No evidence has established that either attorney general brought the lawsuit as a favor to Netflix. Still, the overlap has added another political layer to an already political media fight.
There is also a much more immediate problem for California: Paramount has threatened to leave.
Ellison has told senior executives that the company is prepared to begin relocating Paramount out of California as early as October 1 if the state refuses to find a path toward settlement. The board has reportedly approved preparations for such a move.
Hollywood is still one of California's largest cultural exports and an important source of employment, real estate activity and tax revenue. California's own political leadership seems to understand the stakes. Gov. Gavin Newsom and Los Angeles Mayor Karen Bass have both pushed for some kind of resolution.
For decades, Hollywood has been one of the most reliably left-wing industries in America. Entertainment-sector political giving has overwhelmingly favored Democrats in recent cycles, and the institutional culture of the major studios has generally moved leftward with the rest of elite media.
Now California Democrats may be helping drive one of Hollywood's most important companies out of the state because its new ownership isn't considered politically reliable enough.
California has already lost ground to Georgia, Texas, New Mexico and other states competing aggressively for film and television production. Big Tech has also spent years expanding outside Silicon Valley as companies seek lower taxes, cheaper housing and friendlier regulatory environments.
Hollywood may be starting down the same road. And this dispute is getting expensive fast.
Paramount has agreed not to close the merger before the antitrust trial, which is currently scheduled for March. Beginning around October 1, however, the company is expected to start accruing a “ticking fee” worth roughly $7 million per day if the transaction remains delayed.
Bonta has indicated that any settlement would likely require “structural remedies,” which generally means divestitures or separating major assets. Paramount has resisted that approach.
So the two sides aren't arguing over some minor compliance condition. They're arguing over whether Paramount should have to dismantle pieces of the very company it is trying to create.
California says Paramount needs to “stop playing games.”
Paramount's response, increasingly, seems to be that it can simply take its games — along with its studios, workers, cultural influence, and tax base — someplace else.
