California AG Eyes Block on Paramount-Warner Merger

California's Attorney General, Rob Bonta, is on the verge of deciding whether to challenge Paramount's $110 billion acquisition of Warner Bros. The state's antitrust division is reviewing the proposed merger for potential violations of U.S. antitrust law.

Industry stakeholders, including theater owners and actors, have voiced concerns that the deal could reduce competition, leading to decreased wages, higher consumer prices, and fewer content options. Bonta acknowledged these concerns, noting that his office has heard from many industry workers, raising additional red flags.

Paramount, however, asserts that the merger will incentivize expanded production to drive streaming service growth. CEO David Ellison has committed to releasing 30 movies annually in theaters, viewing them as crucial for marketing streaming offerings. The company stated it has economic incentives to increase production post-merger.

Bonta expressed skepticism about behavioral remedies, suggesting that any promises to address antitrust concerns should be backed by potential divestitures. Antitrust enforcers can challenge mergers that significantly harm competition, including employer competition for specialized labor. California is exploring a joint challenge with other states, though agreements on approach are pending.