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Critics Say California’s Settlement With Paramount Gave Away Too Much to Clear Its Warner Bros Deal
Opponents of the merger argue the settlement does little to protect jobs, fails to meaningfully preserve competition across Hollywood’s film, television and news businesses, and extracted only modest, temporary concessions from a media conglomerate about to become one of the largest in the industry. Some went further, accusing California Attorney General Rob Bonta and Governor Gavin Newsom of buckling under pressure from wealthy business interests, specifically pointing to reports that Paramount had threatened to relocate operations out of California entirely if the state didn’t drop its lawsuit.
Barely a day after Paramount Skydance settled its legal fight with California and a coalition of other states, clearing the last major hurdle to its $110 billion acquisition of Warner Bros Discovery, a wave of criticism erupted questioning whether the state actually secured anything meaningful in exchange for dropping its case.
The terms of the settlement itself help explain why critics feel shortchanged. Paramount agreed to establish independent editorial boards overseeing CNN and CBS, accepted a $30 million penalty for every film it falls short of an annual pledge to release 30 movies, and committed to negotiating separately with television distributors rather than bundling those negotiations across its now-larger portfolio of networks and channels. Each of those commitments, though, comes with an expiration date, set to lapse somewhere between three and five years after the deal closes, a detail critics say undercuts any real long-term protection the settlement claims to offer.
That expiration timeline strikes at the heart of what originally motivated the lawsuit when California and eleven other states first filed it back in July. Their central concern was straightforward: combining Paramount and Warner Bros Discovery under one roof would concentrate enough market power to meaningfully shrink the volume of theatrical and television productions coming out of Hollywood, a worry shared by industry groups well beyond state government. Cinema United, the trade organization representing theater chains including Cinemark, AMC and Regal, and collectively speaking for roughly 30,000 movie screens nationwide, had actually urged Bonta to pursue a settlement rather than prolong the legal fight, hoping to avoid extended uncertainty rippling through an industry still working through its own post-pandemic recovery.
Bonta himself pushed back on the idea that Monday’s settlement amounted to an endorsement of the merger. Speaking at a press conference, he was careful to frame the outcome as something short of approval, saying plainly that it wasn’t a vote of support for the deal because, in his own words, it doesn’t serve competition well. At the same time, he argued the settlement would translate into more film and television production actually happening in California, positioning the concessions as a practical win for the state’s entertainment workforce even if the underlying merger itself remained something he wasn’t fully endorsing.
That defense hasn’t satisfied critics on the more progressive end of the political spectrum, and the disagreement has spilled well past Hollywood’s own trade press into national politics. Massachusetts Senator Elizabeth Warren was among the most vocal critics, describing Paramount as a company that ought to be a clear target for antitrust scrutiny under a future administration more focused on protecting competition. She argued the settlement effectively greenlit a serious blow to market competition, one she warned would ultimately translate into higher prices and fewer jobs while further consolidating control over American media in the hands of a small number of billionaires.
Alvaro Bedoya, a former commissioner at the Federal Trade Commission now advising the American Economic Liberties Project, offered an even sharper assessment, accusing wealthy interests of once again buying, silencing and pressuring their way to a favorable outcome. He warned the settlement would translate into real economic pain beyond Hollywood’s boardrooms, predicting layoffs stretching from Los Angeles to Atlanta, lost contracts for small businesses that service the entertainment industry, and higher costs for ordinary consumers through pricier cable bills and movie tickets.
Much of the criticism has centered specifically on Paramount’s ownership structure. The company is controlled by tech billionaire Larry Ellison, a close ally of President Donald Trump, and run day to day by his son, Paramount CEO David Ellison, a dynamic that’s fueled persistent concern among media watchdogs and now, apparently, among elected officials as well, about whether that political proximity influenced how aggressively California was willing to negotiate before settling.
The broader reaction also points to a wider rift playing out within the Democratic Party more generally, between more business-friendly moderates willing to accept negotiated concessions to avoid prolonged litigation, and progressives pushing for a harder antitrust line they argue is necessary to genuinely protect consumers and workers from further corporate consolidation. This settlement, coming from a Democratic attorney general and governor in the country’s most populous state, has become something of a flashpoint in that larger argument over how aggressively the party should be confronting corporate concentration heading into future elections.
For now, the settlement stands, and Paramount’s path toward closing its Warner Bros Discovery acquisition remains clear, having also already secured sign-off from antitrust regulators in the European Union and Britain. Whether the concessions California extracted turn out to meaningfully protect jobs and competition once they expire in three to five years, or whether critics are proven right that the deal simply cleared the way for exactly the kind of media consolidation the original lawsuit was meant to prevent, is a question that likely won’t have a clear answer for years to come.
