Petition Urges State AGs to Reject Paramount-WBD Concessions

The Block the Merger Coalition has launched a new petition urging the 12 state attorneys general to reject “empty concessions” from Paramount and “hold strong” in their legal fight against its $110 billion merger with Warner Bros. Discovery.

“Financial analysts are now predicting that this deal cannot survive the wait of the trial and that Paramount must settle or risk losing Warner Bros,” the petition states. “We have them on the ropes, but Larry Ellison has proven time and again that he will use his vast wealth and influence to buy allies and control the public discourse. The Ellisons are paying for a powerful campaign to pressure the AGs to sell out our people by organizing a host of often financially conflicted executives and policymakers across the political spectrum.”

The coalition argues that merger concessions “don’t work,” noting that they’re “unenforceable, frequently abandoned and often attempt to pit impacted parties against one another,” citing research from the Writers Guild of America and the American Economic Liberties Project. They further warned that accepting unenforceable conditions from the Ellisons in a backroom rather than fighting in the courtroom is a “losing proposition.”

“Even in the best case scenario, concessions do not protect all workers and consumers. We believe that to make sure no one is left behind, we must #BlockTheMerger. That’s why we’re calling on state AGs to take their case to trial,” the petition continues. “Let’s show them that the power of many is greater than the power of their money. Billionaires have hoarded outsize wealth, but that doesn’t give them the right to control our lives, our media, and break the law. This deal will destroy competition and diversity in the creative sector. The antitrust lawsuit is strong. Let’s have our day in court and let the Judge decide.”

The lawsuit between the dozen state AGs and Paramount is headed to trial in March 2027. Paramount has agreed to delay the closing of the merger until five days after the outcome of the trial, or June 1, 2027, whichever comes earliest.

Starting Oct. 1, Ellison is on the hook to pay WBD shareholders a 25 cent per share ticking fee, which translates to a payout of $650 million per quarter or $7 million per day until the deal is closed. If the deal does not close at all due to regulatory matters, he must also pay WBD a $7 billion break-up fee.

The contractual expiration date on the merger is June 4, 2027.

The latest move by the Block the Merger coalition comes as Iowa Attorney General Brenna Bird and Montana Attorney General Austin Knudsen filed a motion with the Supreme Court urging them to block the “politicized” antitrust lawsuit by California’s Rob Bonta and 11 other states.

The pair allege that the litigation is depriving their states’ economies of the deal’s benefits and and harming “tens of thousands of employees of Paramount and Warner Bros., as well as hundreds of millions who watch their movies, shows, and news through a variety of sources” in the process.

Iowa and Montana also requested that the Supreme Court set a deadline of Sept. 15 for Bonta and the other state AGs to respond and an Oct. 9 conference hearing. A spokesperson for Bonta’s office previously told TheWrap it is reviewing the filing from Bird and Knudsen and that it will “respond as appropriate.”

Meanwhile, a number of parties have called for a settlement between the states and Paramount, including California Gov. Gavin Newsom, Los Angeles Mayor Karen Bass, the Democratic nominee in California’s gubernatorial race Xavier Becerra, the Directors’ Guild of America and IATSE.

In an interview with TheWrap on Monday, Bonta reiterated that the state AGs are “not interested” in behavioral remedies being offered by Paramount, such as Ellison’s pledge for 30 theatrical film releases a year.

In terms of specific examples of what a structural remedy could look like, Bonta said that someone else would have to own a “significant” portion of the 50 basic cable channels that would be included under the combined company, though he stopped short of saying CNN would be one of them.

“We have some thoughts on [specific channels]. I’m not going to share those with you. If we do end up ever having productive settlement negotiations, that is something to be discussed,” he added. “But the idea of what it means to have a structural remedy, for example, in the basic cable channel licensing market means separate ownership of a significant number of those channels.”

The Wall Street Journal has also reported that Bonta is interested in keeping the operation of the two companies’ studios separate. Bonta’s comments came after he canceled a mediation session with Paramount that was scheduled for Monday following the WSJ’s report.

Though Bonta said he remains open to “good faith” discussions to settle the lawsuit as early as this week, he emphasized that the states will only return to the negotiating table if Paramount Skydance agrees to “stop leaking and stop misrepresenting through their leaks” to the press.”

“It’s up to them,” he added. “They’ve got to figure out where the leaks are and shut them down. And once they figure that out, we’ll be happy to talk with them. I don’t know how long it’ll take them to figure it out and to fix it, but when they do, we’re ready.”

TheWrap exclusively reported a Los Angeles County study which found that the merger could result in nearly 4,500 film and TV jobs lost over the next three years when the two companies combine. It could also put over 5,800 indirect or induced jobs from related small businesses at risk, per the study.

Overall, the economic impact of losing these jobs would be $1.26 billion in wages, $2.78 billion in economic value, $4.06 billion in total business output and $547 million in tax revenue, including $78.6 million in local taxes — most of which (63%) comes from property taxes.

However, Ellison has threatened to move Paramount’s operations out of the Golden State if a settlement can’t be reached, a move experts warn could also be “devastating” for the local economy.

The Block the Merger coalition slammed Ellison’s threat, arguing that it proves his “disregard for industry workers” and that “only desperate people make threats like that.” Bonta, who has called the threat “blackmail,” emphasized in his interview with TheWrap that no matter where they decide to go, the lawsuit will continue. 

“They can’t escape accountability. There’s no reason, based on our lawsuit, for them to go anywhere else unless it was their plan all along before this lawsuit to always go to another state,” Bonta said. “Maybe they think it’s clever, maybe they think it’s helpful to be engaged in the court of public opinion. But as I’ve said time and time again, and I’ll say it now, this is a very straightforward, black and white, bread and butter, meat and potatoes antitrust case about three markets.”

“If there ever is a decision to leave California, that is completely David Ellison’s decision,” he added. “He owns it. It is laid at his feet. He’ll have to explain the 180-degree turnaround from ‘I’m committed to the future of Hollywood’ to ‘now I’m leaving.’”