The Democratic Party tries to derail the agreement between Paramount and Warner to create an audiovisual colossus
The operation, valued at 111 billion dollars, has Trump's support
The merger between two entertainment giants has encountered the most serious attempt to legally abort this agreement. A coalition of twelve states under Democratic Party rule, including strategic states like California, New York, and Washington, has filed a joint lawsuit demanding that the acquisition of Warner Bros. Discovery by Paramount be judicially vetoed, as they believe the film distribution market will become uncompetitive, leading to potentially irreparable losses for cinema owners. The plaintiffs also believe that the deal, valued at 111 billion dollars, will affect competition in cable channels, including CNN.
"The merger will permanently end competition – states the text presented by the states. The most probable outcome is higher prices, lower quality, and less film content." Beyond the possibility that the agreement may eventually fall through, the mere fact of delaying it is already causing a significant headache for Paramount, as they committed to paying Warner's shareholders 650 million dollars for each quarter that the operation is not finalized after October.
On Paramount's side, a spokesperson rejected the plaintiffs' premises, stating they were "wrong in both facts and legal basis." According to their version, the agreement would "strengthen competition, expand opportunities, and the resulting company will be able to compete in an increasingly contested global media landscape."
The case has a significant political dimension because behind the operation are billionaire Larry Ellison and his son David, considered close to Trump. In fact, Netflix was the first suitor for Warner Bros. Discovery, and there was even a preliminary agreement, but political pressure ultimately thwarted the pact. David Ellison is the president of Paramount and, if his plan materializes, he would control two of the main news networks, CBS News and CNN, two major Hollywood studios (Paramount and Warner Bros.), and two streaming services: Paramount+ and HBO Max.
