San Francisco (United States) (AFP) – Paramount Skydance agreed on Friday to delay its $110 billion merger with Warner Bros.Discovery while a US lawsuit seeking to block the deal moves forward. If the merger eventually closes, the new combined company would reshape the entertainment and media industry, in addition to delivering a major win to its owners, the Ellison family, who are close allies of US President Donald Trump. Paramount agreed to delay the deal through June 2027, the company said in a court filing on Friday.
Rob Bonta, attorney general of California, which is leading a coalition of 12 states that last week sued to block the deal, welcomed the agreement. “We are eager to continue to make our case in court and celebrate another tremendous win in our effort to ensure this unlawful merger never sees the light of day,” Bonta said in a statement on Friday. The other 11 states joining the suit, all Democratic-led, are Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington. “Halting this merger while our case proceeds is a critical victory in our efforts to uphold the law and protect the film and television industries,” New York Attorney General Leticia James said in a statement on Friday.
The Trump administration approved the blockbuster deal on June 12 without demanding a single change, clearing the way for one of the largest media mergers in years. A federal judge in California ordered the companies to temporarily pause the deal in a ruling on Monday, just two days before the European Union gave the merger a conditional green light. The US states raised “serious questions” about the deal’s potential to be anticompetitive, the judge said in her ruling, adding that “the balance of equities and public interest tip sharply in favor of the Plaintiff States.”
In their complaint, the 12 states claim the combined company would control roughly 27 percent of wide-release theatrical film distribution and a similar percentage of basic cable channel licensing. California’s attorney general said last week that the combination of two of Hollywood’s five major film distributors would lead to “higher prices, lower quality, and less content” for audiences. The saga has become politically charged, with President Donald Trump publicly saying he would weigh in on the deal as the fate of CNN — a news network that is a frequent target of the president’s ire — hangs in the balance.
The merger would put a sprawling roster of assets under the control of a single company. Those media assets include CNN, Warner Bros.Pictures, and the HBO Max streaming service. The battle over Warner Bros. began last year when media giants Netflix and Paramount went to war over the famed movie studio and its prized back catalog. A wary Tinseltown reluctantly lined up behind Netflix as the lesser of two evils, only to watch Paramount keep raising its bid until the streamer walked away in February.
© 2024 AFP
