Hollywood
Paramount-Warner merger hits fresh roadblock as California seeks channel sales
State officials could demand cable divestments and safeguards for Warner’s film studio
LOS ANGELES: Hollywood’s biggest merger is facing another plot twist, with California expected to seek the sale of some television channels from Paramount as a condition for approving its proposed $110 billion acquisition of Warner Bros. Discovery, according to a Wall Street Journal report.
California attorney general Rob Bonta is also expected to seek commitments from Paramount to keep its movie studio separate from Warner Bros. as part of efforts to resolve the state’s antitrust concerns, the report said, citing people familiar with the matter.
Paramount and California officials are scheduled to meet on Monday to discuss possible ways to settle the state’s antitrust lawsuit against the deal.
Lawyers representing the two sides met on Friday to prepare an agenda for the discussions, with the cable and motion-picture businesses expected to be among the issues under consideration.
The potential sale of cable channels would represent a significant concession as Paramount seeks regulatory approval for its acquisition of Warner Bros. Discovery.
California and 11 other states sued in July to block Paramount’s proposed $110 billion acquisition of Warner Bros. Discovery.
The states have argued that combining the two media groups could reduce competition in film distribution and cable television, potentially harming cinemas and pay-TV distributors.
They have also raised concerns that the transaction could lead to higher prices for consumers and weaken wage competition for workers.
Paramount has argued that the merger would enable the combined company to produce more content rather than less. Chief executive David Ellison has pledged that the merged film studios would release 30 movies a year.
The states, however, have argued that the commitment is not enforceable.
The latest talks suggest California may be looking for structural remedies, including cable channel divestments, alongside safeguards around Warner Bros.’ film studio before deciding whether to support the transaction.
For Paramount, the negotiations could prove crucial as it attempts to clear the final regulatory hurdles for one of the biggest media deals in recent years.
