California Gov. Gavin Newsom is reportedly raising concerns behind closed doors about his own state’s antitrust lawsuit against Paramount’s $110 billion acquisition of Warner Bros. Discovery.
In recent weeks, Newsom – who is widely expected to run for the 2028 Democratic presidential nomination – has told people involved in the matter that if the media merger is blocked, it could hurt Hollywood jobs, the Wall Street Journal reported Friday.
The governor’s office has urged Attorney General Rob Bonta, who is leading the coalition of 12 lefty state AGs behind the suit, to settle the issue out of court – creating a sharp divide between two top California officials.
Newsom is not involved in the lawsuit and does not have authority over the state attorney general, so it is unclear what impact, if any, his word will have.
The lawsuit, which argues the deal would harm consumers and reduce competition, is currently the biggest obstacle keeping Paramount from completing its deal after a Biden-appointed federal judge last week issued a temporary restraining order against it.
US District Judge Araceli Martínez-Olguín is expected to decide on the timing of the trial at an Aug. 3 hearing for the states’ motion for a preliminary injunction, a more serious freeze of the deal – and any delay could end up costing Paramount millions.
If the deal is not completed before Oct. 1, a costly “ticking fee” kicks in that adds 25 cents per share to the cost of the acquisition for each quarter it is not completed – coming to a painful $7 million per day.
The rise of streaming, the consolidation of film distribution giants and intense layoffs have weighed on Los Angeles over the years – and Bonta has argued the merger will intensify these effects and lead to “higher prices, lower quality, and less content for film and television.”
According to his lawsuit, the new Paramount-WBD conglomerate would control nearly one-third of the US theatrical film distribution market and almost one-third of the nation’s basic cable programming.
The proposed deal would combine HBO Max, Paramount+, HBO, CBS, CNN and thousands of movie titles under one company led by David Ellison, the son of Oracle billionaire and close Trump ally Larry Ellison.
Paramount has repeatedly defended the merger and stuck to its original goal to close by the end of September, noting that it was already swiftly greenlit by the US Department of Justice, as well as authorities in Australia and China.
Last week, European Union regulators also issued conditional approval of the deal after Paramount offered several concessions to get the merger rubber-stamped.
Any pause on the deal would also keep the future management of CNN in limbo for weeks longer, as the network’s top anchors have reportedly grown panicked over their editorial independence after Ellison installed Bari Weiss to run CBS News after his last media merger.
Newsom’s and Bonta’s offices declined to comment.
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