California Attorney General Rob Bonta has promised a “vigorous” review of Paramount Skydance’s acquisition of Warner Bros. Discovery and warned companies not to get ahead of regulatory proceedings while celebrating.
“The deal between Paramount and Warner Bros. is far from over. These two Hollywood titans have not cleared regulatory scrutiny. The California Department of Justice is conducting a public investigation, and we will conduct a vigorous investigation,” Bonta said in a statement Thursday night.
Bonta’s letter comes at the end of an extraordinary day of twists and turns that put Paramount Skydance in position to acquire Warner Bros. Discovery in its entirety. After increasing the bid price by $1 per share, WBD board members had little choice but to accept the offer. Netflix had previously entered into a sale agreement with WBD in December and had the right to counter this. But Netflix took the bait early, issuing a statement saying that rising prices had made the deal “no longer economically attractive.”
Bonta had already notified Netflix and WBD that Golden State would seriously consider merging Hollywood’s traditional studios with the industry’s dominant subscription streaming platform. Mr. Bonta’s move from deep-blue California adds to the political backdrop swirling around big business, especially big media, at a time when President Trump himself regularly bashes mainstream entertainment and news outlets.
On Tuesday, before Netflix withdraws from the WBD investigation, a coalition of 11 state attorneys general, all Republicans, called on the Justice Department to carefully scrutinize Netflix’s contract with Warner. The attorney general warned in the letter that the deal “is likely to result in unfair market concentration that inhibits competition, resulting in higher prices, lower reliability, and less innovation.”
They also expressed concerns that streaming subscribers would face higher prices and that the merger would have a negative impact on the theater business. The letter notes that the United States remains the “world leader in film,” and concludes with a premonition that “Netflix’s quest to become the ‘one platform to rule them all’ through its acquisition of Warner Bros. threatens this dominance.”
The 11 attorneys general represent the states of Alabama, Alaska, Iowa, Kansas, Montana, Nebraska, North Dakota, South Carolina, Tennessee, Utah, and West Virginia.
