Paramount has reached a settlement with a group of US states that clears the way for its takeover of Warner Bros. Discovery, officials announced Monday, creating a Hollywood empire spanning television, news and cinema. Paramount, which is run by David Ellison, whose ultra-wealthy family has ties to US President Donald Trump, won a bidding war against Netflix in February for control of a stable of assets that includes Warner Bros.
Pictures, CNN and the HBO Max streaming service. The Trump administration approved the deal, one of the largest media mergers in years, in June without demanding a change to its business, before 12 US states sued to block the transaction. Financing for the deal reportedly includes about $24 billion in equity from the sovereign wealth funds of Saudi Arabia, Qatar and Abu Dhabi.
David Ellison's father, billionaire Oracle founder Larry Ellison, also provided funding and a guarantee. Opponents in the movie industry said the combined company would slash jobs in a Hollywood already under pressure and reduce the number of films produced every year, while news media groups feared CNN's independence could be compromised. The deal includes several safeguards on these issues, including a board meant to protect CNN's editorial independence.
The news comes just days after Trump banned CNN, Politico and MS NOW from the White House. The outlets are suing the administration to have the decision reversed. Paramount had threatened to move out of California if the state's attorney general, Rob Bonta, did not negotiate an end to the lawsuit.
In their complaint, the 12 states argued the combined company would control roughly 27 percent of wide-release theatrical film distribution and a similar percentage of the basic cable channel industry. California led the suit, joined by Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington, all Democratic-led. Four states -- Massachusetts, New York, Connecticut and Minnesota -- had held out but concluded that fighting on without California was not worth the expense, Bloomberg reported.
Bonta told reporters that protecting jobs was a major concern in his handling of the case and acknowledged that many people may be disappointed with his decision to strike a deal. "My job as attorney general is to look at the facts and look at the law, weigh the options in front of us, and make the best decisions for the people of California," he said. Bonta said the settlement includes a commitment that the merged studio would produce 30 movies in each of the first two years of the deal, and 32 movies in each of the following three years.
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