Paramount-Warner Bros $110 Billion Deal Draws Antitrust Backlash

California’s settlement clearing the way for Paramount Skydance’s $110 billion acquisition of Warner Bros Discovery has drawn sharp criticism from antitrust advocates and lawmakers who warn the merger could reduce Hollywood competition, threaten jobs and raise consumer prices.

Critics accused California Attorney General Rob Bonta and Governor Gavin Newsom of giving in to pressure from Paramount CEO David Ellison after the company threatened to leave California unless the state dropped its lawsuit challenging the acquisition.

Alvaro Bedoya, a former Federal Trade Commission member and adviser to the American Economic Liberties Project, said the agreement could lead to layoffs, lost contracts for small businesses and higher entertainment costs.

Democratic Senator Elizabeth Warren also criticized the Paramount-Warner Bros deal, calling Paramount a potential target for future antitrust scrutiny. She argued the merger could concentrate greater control of American media among a small group of wealthy owners.

Bonta stressed Monday that the settlement was “not a vote of support” for the acquisition, acknowledging concerns about competition while arguing that the agreement could increase film and television production in California. Ellison said the combination would strengthen competition and benefit consumers and workers.

The settlement stops short of requiring Paramount to divest cable networks or valuable entertainment assets. Paramount controls major franchises including “Top Gun,” “Mission: Impossible” and “Star Trek,” while Warner Bros owns rights associated with Batman, Harry Potter and “The Lord of the Rings.”

Instead, Paramount agreed to establish independent editorial boards for CNN and CBS and faces a $30 million penalty per film if it fails to meet its commitment to release 30 movies annually. The company also pledged to negotiate separately with television distributors. Those requirements expire within three to five years.

Public Knowledge legal director John Bergmayer warned that consolidation could leave fewer studios competing for scripts and talent while giving Paramount greater negotiating power with distributors.

The settlement also had supporters. Cinema United, representing theater operators including Cinemark, AMC and Regal, had encouraged negotiations to reduce uncertainty surrounding the acquisition. Iowa and Montana separately sought US Supreme Court intervention against California’s attempt to block the deal.