California Attorney General Rob Bonta has a message for Paramount: "Focus on the case in front of you." He says the company keeps trying to talk about streaming and CNN, but those topics are not part of the lawsuit.
Bonta called the case "meat-and-potatoes, black-and-white, bread-and-butter" antitrust law, pointing to the Clayton Antitrust Act, a law over 100 years old that bars anticompetitive mergers.
This concentration of about a third of films and a third of basic cable programming is "presumptively illegal" under the law, Bonta said.
The combined company would include Warner Bros. and Paramount studios, CBS, MTV, BET, Discovery and CNN on the television side, and Paramount+ and HBO Max in streaming. Bonta pushed back on the idea that a shrinking pay TV market should matter to the case. "Whether the market is shrinking or growing is really irrelevant," he said.
When a merger faces such robust structural remedies, grab the free Always Be Buying E-Book to build wealth steadily
The states argue that the combined company would have too much control over film output and basic cable programming. Bonta said the states are willing to settle if the companies accept structural remedies, including possible asset sales, rather than just monetary penalties.
Paramount has called the lawsuit a "misrepresentation of competition in the entertainment industry today" and said it will "vigorously defend the transaction." Lead trial counsel Jeffrey Kessler said the company is prepared to take the case to the Supreme Court if needed. CEO David Ellison said he is "confident" the deal will close.
Bonta said the states are open to settling. "We do prefer to resolve cases in the boardroom instead of the courtroom," he said. "I hope they can focus on the actual allegations we make in our complaint."
The delay gives both sides time to negotiate, but it also means months of uncertainty for shareholders.
For investors, the timeline matters. A trial in March means the deal's fate could hang in the balance for months. If the deal falls through, both companies would face an uncertain future on their own. If it goes through, the combined company would control a massive slice of what viewers watch.
Under the Clayton Act, the government can block a merger if it substantially lessens competition. The states argue that the combined market share in film and basic cable is so large that it automatically triggers a presumption of illegality, forcing the companies to prove the deal would actually benefit consumers. This legal framework is why Bonta insists on "robust structural remedies" - such as divesting certain assets or altering business practices - rather than just monetary penalties.
When antitrust battles like this test your patience, try the Always Be Buying E-Book for consistent investing