DGA & IATSE Urge Fast Track On Paramount-WBD Legal Standoff

Two of Hollywood’s most powerful unions have a message for California Attorney General Rob Bonta and Paramount Skydance CEO David Ellison: Work it out ASAP, whether in court or otherwise.

The DGA and IATSE sent a joint letter to the pair on Wednesday to “raise concerns about the potential for a prolonged timetable for the litigation” and encourage them to make nice after their legal standoff over the proposed merger with Warner Bros. Discovery has Ellison threatening to pull his studio out of the state completely.

At the very least, the unions — which jointly represent nearly 200,000 film and television workers across the U.S. and Canada — want the antitrust case sorted out in court sooner than the current March 2027 trial date.

“While we have been consistent in our view that mergers, such as this one, historically offer few benefits to workers, we are also particularly concerned about the negative impact a delay in the decision regarding the proposed merger will have on our members and the industry at large,” the letter reads. “We further believe the benefits and detriments of the proposed merger should be measured against the alternative outcomes if it is not approved, especially if the anti-competitive impacts of the proposed merger can be mitigated by a binding agreement.”

The unions’ letter argues that the current trial timeline would deal an irreparable blow to an already struggling domestic film and television industry, particularly in California, where production is down more than 40%.

It continues: “As our members struggle to find employment, the uncertainty surrounding the proposed merger is only making matters worse. We are aware of productions that have been put on hold or canceled altogether, leading to further reductions in available work for our members and other industry workers.”

The letter also includes a list of proposed “enforceable conditions” that would allow the merger to continue without detrimental effects on the competitive market.

The conditions are:

• The maintenance of Paramount and WBD motion picture studios as separate studios, with each studio maintaining its own production, distribution, marketing and exhibition groups as distinct divisions;
• The production and distribution by each motion picture studio of a minimum of 15 theatrical films per year with an exclusive theatrical window of at least 45 days (preferably 60 days or more) before PVOD exploitation and 120 days before SVOD exhibition;
• An agreement that Paramount and WBD will continue to license theatrical films from third parties at no less than the average percentage of films licensed from third parties over the past five years (excluding 2020 and 2023);
• The same separate operational structure for Paramount and WBD’s television studios as applied to the motion picture studios;
• The maintenance of HBO as a linear pay television channel that will continue to be available on third party platforms (e.g., MVPDs and Amazon video);
• A commitment to produce films and television shows in the United States at no less than the average percentage produced in the United States during the past five years (excluding 2020 and 2023);
• A commitment to license original content on the combined entity’s linear channels and streaming platforms from third parties at no less than the average percentage of licensed original content during the past five years (excluding 2020 and 2023);
• A commitment that Paramount and WBD will continue to be sellers in the marketplace; and,
• A commitment that Paramount will continue to be based in Los Angeles.

The message from the DGA and IATSE comes about a day after the news broke that Ellison had told senior executives that he would begin the process of moving Paramount out of California on October 1, if Bonta didn’t attempt to settle the case he’s leading with a group of 20 state AGs to block the WBC acquisition. October 1 is the day Paramount starts to accrue a so-called ticking fee of $7 million a day agreed to in the WBD deal terms if the transaction hasn’t closed by then. Paramount had previously asked the judge for a November trial date.

California Governor Gavin Newsom and Democratic gubernatorial candidate Xavier Becerra have both expressed desire for a settlement as well. So far, Bonta has showed no signs of backing down, calling Ellison’s threat “another attempt to blackmail the state into letting an illegal deal through.”

The Hollywood labor unions have all expressed varying degrees of wariness over the merger. The Writers Guild of America, which is also suing to block the merger, said yesterday in a statement, “This type of behavior is precisely why the merger should be blocked.”

SAG-AFTRA has stayed quiet thus far on the latest developments, but it has publicly opposed the merger unless there are certain production guarantees.