Rob Bonta, California’s Attorney General, is promising to conduct a “vigorous” review of Paramount Skydance’s acquisition of Warner Bros. Discovery as he warned the companies not to get ahead of the regulatory process in their celebrations.
“Paramount/Warner Bros is not a done deal. These two Hollywood titans have not cleared regulatory scrutiny — the California Department of Justice has an open investigation, and we intend to be vigorous in our review,” Bonta said in a statement issued Thursday evening.
Bonta’s missive came at the end of a day of extraordinary twists and turns that have put Paramount Skydance in position to buy up Warner Bros. Discovery in its entirety. After raising its bid price by $1 a share, WBD board members had little choice but to accept that offer. Netflix, which had previousy sealed a sale agreement with WBD in December, had the right to match. But Netflix cut bait early, issuing a statement saying that the deal was “no longer financially attractive” with the price tag growing.
Bonta had already put Netflix and WBD on notice that the Golden State would take a hard look at the consolidation of a legacy Hollywood studio with the industry’s dominant subscription streaming platform. Bonta’s move from the deep-blue state of California adds to the political backdrop swirling around big business, particularly Big Media at a time when President Trump himself regularly bashes mainstream entertainment and news outlets.
On Tuesday, before Netflix pulled out of the hunt for WBD, a coalition of 11 state attorneys general — all Republicans — urged the Department of Justice to carefully scrutinize the Netflix-Warners deal. In a letter, the attorneys general warned that the deal “will likely result in undue market concentration that stifles competition and therefore creates higher prices, lower reliability, and less innovation.”
They also expressed concerns that streaming subscribers will face higher prices, and that the merger will be bad for the theater business. Noting that the U.S. remains the “world leader in movies,” the letter closed with a premonition: “Netflix’s quest to become ‘the one platform to rule them all’ through its acquisition of Warner Brothers threatens this dominance.”
The 11 attorneys general represent the following states: Alabama, Alaska, Iowa, Kansas, Montana, Nebraska, North Dakota, South Carolina, Tennessee, Utah and West Virginia.