PSKY Defends WBD Merger

Paramount Skydance is pushing back against antitrust concerns, arguing that its $111 billion takeover of Warner Bros. Discovery will increase competition in the entertainment industry rather than reduce it.

In a May 7 letter to California Attorney General Rob Bonta, Paramount chief legal officer Makan Delrahim reiterated the company’s commitment to California movie theaters and audiences, calling the merger a source of “new competitive energy.” 

The letter responds to what Paramount describes as misinformation about the deal’s impact on the marketplace.

The lobbying effort comes as Bonta and other state attorneys general review the proposed merger for potential antitrust violations. On Monday, Bonta told reporters the deal raises “red flags everywhere,” with his office scrutinizing risks of higher prices, lower wages, fewer jobs, reduced consumer choice, and less competition. California recently joined other states in suing to block the Nexstar-Tegna merger.

In the letter, first reported by Semafor, Delrahim argued that a combined Paramount and Warner Bros. Discovery would deliver “meaningful improvements” for theaters and audiences. He highlighted David Ellison’s commitment to releasing at least 30 films per year from the merged company.

Delrahim also contended that Paramount+ and HBO Max individually lack the scale to compete effectively against larger streaming services like Netflix, Disney+, Hulu, and Amazon Prime Video.

Deal opponents are intensifying their campaign against the Paramount-Warner Bros. Discovery merger, warning it will lead to fewer jobs and reduced consumer choice.

They are pointing to recent antitrust battles as cautionary examples. Although the Trump Justice Department settled its case against Ticketmaster and Live Nation, a coalition of state attorneys general secured a jury verdict against the companies. Similarly, multi-state litigation has stalled the Nexstar-Tegna merger, with courts still weighing claims that the combination of local TV station groups is anticompetitive.

Nexstar CEO Perry Sook defended the fight this week in comments to investors: “We believe this is a fight worth having — for us, for the industry, and for the future of local journalism.”