Last week, politicians decided they could not let Hollywood slip away. Gavin Newsom pushed for a resolution of the Paramount antitrust case out of fear that the studio would leave the state. And in Congress, Republicans and Democrats joined to introduce a U.S. film incentive, recognizing they are at risk of losing a critical industry to foreign competition.
In short, it was the week that Hollywood became too big to fail. The Paramount antitrust settlement entails five years of government monitoring and commitments to keep ownership of studio lots, to produce a certain number of films and to install an oversight board as a watchdog for news networks CBS and CNN. Neither side in the merger battle wanted this outcome.
Paramount CEO David Ellison wanted to buy Warner Bros. Discovery without conditions but was willing to accept some state intrusion as the price of scale. California Attorney General Rob Bonta, meanwhile, wanted to block the deal outright or at minimum force divestitures.
Just a week later, Bonta flipped and announced a package of behavioral remedies. The consent decree requires Paramount to release at least 30 films a year and to negotiate WBD and Paramount cable carriage contracts as separate entities. The deal even requires Paramount to quadruple its U.S. production volume if a federal subsidy is adopted.
Bonta’s critics called the deal a “cave.” Compared with blocking the merger, it is. But it also commits the attorney general’s office to enforcing Paramount’s production levels in an unprecedented way. But unions and studio chiefs celebrated last week’s developments.
Now Republicans are coming around too. Last year, Texas increased its state incentive and offered bonuses for “faith-based” projects and films that promote Texas heritage. Across party lines, the fear of losing Hollywood has proved a powerful motivator.
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