Daniel Wolfram
The canceled meeting just gave the merger between two giant film studios another aspect to this ongoing saga. A saga that involves Trump, a tech billionaire, politicians, and people in Hollywood.
A potentially monumental deal is shaping up between two major film studios that are set to merge into one.
The deal would reshape the movie production landscape and the livelihoods of up to a quarter million people in California.
But the talks about the merger have just hit a major roadblock.
Paramount and Warner Brothers might become one film studio
The background for all of this is that billionaire Larry Ellison, who owns the tech giant Oracle, bought Paramount last year. The deal was controversial because the Trump administration was adamant that Larry Ellison and his son David were allowed to sidestep regulators to quickly buy Paramount since the company also owns CBS News, a news network that Trump previously had been critical of.
About six months ago, the Ellisons wanted to expand their movie and news network portfolio even more. At the same time, Warner Brothers was interested in selling to the highest bidder. The deal was between Netflix and Paramount, and in the end Paramount had the biggest cash offer.
The deal currently sits at $111 billion. The US Justice Department was quick to approve this deal since the Ellisons, who have since won the favor of Trump himself, would now also own and control CNN.
However, the merger has been blocked by lawmakers arguing that the deal would be harmful to the film and news industries and march toward a monopoly on movies and news in America. There is now a court case in place to settle this for March of next year.
California’s top lawyer calls off meeting
Yesterday, Paramount executives were supposed to meet with California’s attorney general, Rob Bonta, to smooth things over and try to get this deal through before the trial begins.
But Bonta canceled that meeting with rigor. He accused the Ellisons of acting in bad faith.
In a statement, Bonta wrote, “Not only did Paramount leak the alleged substance of settlement discussions, but they misrepresented these discussions, demonstrating a lack of good faith. As soon as Paramount stops playing games and engages sincerely, my office is happy to meet again.”
A huge issue before the midterms
Paramount was quick to try to smooth things over. “We share A.G. Bonta’s concerns about the public discussions and misreporting that have surrounded this deal,” Paramount said in a statement. “We remain hopeful and stand ready to continue good-faith discussions to resolve the Attorney General’s suit and move forward with our plans for increased competition and increased output to the benefit of the talent and entertainment workers.”
Paramount is trying to hurry this merger through since the deal with Warner Brothers is that Paramount has to pay them hundreds of millions of dollars every day in penalties.
Politicians across the aisle are also trying to get the merger wrapped up. The outgoing Governor Gavin Newsom commented that he would like to see a deal fall into place. And the favorite to replace Newsom, the Democratic nominee Xavier Becerra, would also like to see the lawsuit settled.
“I’m concerned about the state, our reputation,” Gavin Newsom said. “I want to see Hollywood thrive.”
Meanwhile, California AG Rob Bonta is concerned about two things in the merger. One, he argues it would create an unfair advantage and monopoly-like status in the film, news, and entertainment business. Two, a new report projects 4,500 job losses in California and over a billion dollars in lost wages.
