派拉蒙1100亿美元收购华纳兄弟和解，未剥离资产

This is Bloomberg Law with June Graasso from Bloomberg Radio.

This settlement is not a vote of support for this merger. It is not a blessing of the broader merger. Broadly speaking, we believe further consolidation in markets that are central to American economic life doesn't serve the American economy, consumers, or competition well. The settlement of the antitrust lawsuit brought by 12 states may not be a vote of support for Paramount's historic $110 billion acquisition of Warner Brothers, but it was a vote to remove the final obstacle to the deal.

Attorneys general from 12 states and the Writers Guild had sued to block the deal, arguing that it would give Paramount an undue share of the movie and cable TV industries. The settlement announced by California Attorney General Rob Bont doesn't do anything to change that dominance. It just calls for some new commitments from the company without any devestatures. The block, the merger coalition, which represents more than 40 organizations that oppose the tieup, slammed the settlement, calling it a sweetheart deal. quote, "We are disappointed and angry that the interests of average Americans have been trampled to benefit oligarch billionaires."

The blockbuster deal will vastly reshape Hollywood with Paramount now controlling two of its biggest studios, two major subscription streaming services, and dozens of TV channels ranging from CBS to HBO. Joining me is Bloomberg Intelligence senior litigation analyst Jennifer Ree. Jen, what is Paramount giving up to get this settlement? Very little. Really, at the end of the day, I think this is a win for Paramount and a surprising settlement.

Um, because we all expected something structural, a structural aspect, and that's where I see it as a win for Paramount because there's nothing structural in it. By that, I mean, June, that they have to sell something rather than just making a bunch of promises about how they're going to behave once they're merged. Now, there are some divevestature commitments in here, but only if the merged company is in breach of certain terms, which I doubt they'd be in breach of because it's actually a pretty easy agreement with which they can abide.

And I understand that a lot of these terms Paramount had been offering for months, including releasing 30 films a year in theaters.

Yes, you know, they had. And I think in some ways I believe some of these commitments really aren't a big change from the way they've just always done business. You know, for instance, people are talking about this commitment to release 30 movies to theaters every year. Now, that's release, not make. So, it doesn't necessarily have to be a movie that they produce, but they only have to either produce or co-produce 50%.

So, that's the first thing. And it's really not that different from what they're already each individually doing. So, this isn't asking for much from Paramount.

And it seemed like California and the states were holding all the cards. Paramount was set to face late fees of $7 million a day if it didn't close the deal by the end of the month and $7 billion if the deal fell apart. The states beat Paramount in court, winning a court-ordered pause on the merger, and the company agreed to pause the merger until as late as next June. It seemed like they had an edge in the negotiations at this point.

Absolutely. It was a very odd situation because I think the states very much had leverage, not because their case against the merger was so strong, because honestly it wasn't that strong, but because time time and the financial aspects were on their side. And I really think that they could have waited this out. It would have put more pressure on Paramount. Maybe they might have gotten better terms. But then Paramount, knowing I believe that it didn't have the leverage it needed for a settlement negotiation to come out favorably, threatened to leave California.

And I think that's what did it because that would have been devastating on the state and had an impact on the state's economy as well as so many employees and people who live there. And I think it was that threat that the attorney general of California called blackmail. I think of it as just trying to do what they can to get leverage. That did give them the leverage to get to this settlement and to get to it when they did, which was midepptember.

And I kind of thought late September would be more likely.

Apparently, pressure was on the attorney general Bont from the governor, LA's mayor. I mean, would Paramount really have left California in the end?

It really would have been a major disruption to their business and actually quite an endeavor and very expensive for them. And that was the big question. You know, it was funny. I had so many clients saying, you know, are they going to do this or not? Is this a real threat or not? And I'd say, look, I'm not in their head. I can't say what the company would or wouldn't do, but it was enough of a threat. There was enough of a concern that it did what they wanted it to do, which was to get a settlement out of the states and a settlement that's widely favorable in my view to Paramount.

So, California had its reasons for this, but the other states, and there were several states that were holding out, including New York, Connecticut, Massachusetts, and Minnesota. According to Bloomberg sources, they decided that the expense of litigating without California would be too much. So, litigation would be too much for those states. You know, I have to say that if you look at the cases where states have been the plaintiffs and alone without the federal government or without private parties, it tends to be pretty big groups of states.

You have 12. You have 14. I think it was something like 14 when the state sued to block T-Mobile and Sprint. You had a pretty big group of states going after NextStar and Tegna. And also a big group of states going after Live Nation. They have very small group, you know, they one or two antitrust attorneys. They don't have the money. They don't have the physical resources. And then they they're going up against major heavy hitter lawyers on the other side and unlimited resources essentially.

They really do need and California was leading. So you have to remember that this litigation now has been going for quite some time. California's been in the lead. It is a little bit difficult for another state to take over that role and jump in. So, I do think that once California and, you know, other states aside from New York had decided that they were going to settle, the other states really had to, as did the Writer's Guild of America, which was also a plaintiff.

Yeah, the Writer's Guild apparently was blindsided.

Right. I haven't seen as much news, but the settlement they reached is even weaker. And I I think they must have been blindsided because their concerns about harm were to writer markets, writers of movies, writers of television shows, writers that are uh signed on contract with studios. And instead, what they agreed to was some guarantee of employment for CBS News Bureau, which is different from the areas which they said would be harmed.

So now let's talk about that. You have now Paramount is going to control both CBS News and we've seen what's happened at CBS News. So he they'll control CBS and CNN and apparently the Connecticut Attorney General was really pushing for a devestature of those networks, but Ellison would not agree to that.

So now there's going to be an independent editorial oversight board. What does that mean?

Well, you know, let's just say that it's really something that's quite uninforceable. So, it's a board made up of five people. They have to be journalists, retired or currently act acting journalists. And there, you know, a bunch of qualifications written into the settlement as to what that means to be an experienced journalist. And no more than two can be from the same pol