paramount skydance

Did California come out a winner when Atty. Gen. Rob Bonta settled a multi-state lawsuit against Paramount Skydance on Monday, allowing its $111-billion purchase of Warner Bros. Discovery to move forward?

That’s the question everyone is trying to figure out, as the 32-page agreement is parsed, with pundits pouring over minutiae of cable streaming and tax credits. I’ll leave that to the business experts, but I’m here to give you a big picture of politics, power and possibilities — and one short but unsatisfying answer about whether this deal is good for the Golden State: Yes and no.

I’ll start with this: Did California win is the wrong question. There was always something bigger at play here that was lost behind the fear of further decimation to an industry so central and crucial to the state. The question the lawsuit asked is, “Do we live in an America where government institutions are so broken that power makes its own rules?”

The settlement might not give the entertainment industry all it hoped for but it was “a fight worth fighting,” said George Hay, a professor at Cornell Law School and a former attorney with the U.S. Department of Justice’s Antitrust Division, because it sought to answer that question in favor of consumers, and showed that states like California can and will step up to fill a dangerous void.

Under the Trump administration, the U.S. Department of Justice hasn’t so much abdicated its responsibility to enforce antitrust laws — it has embraced an oligarchic ethos that seems happy to feed the American economy into the mouths of behemoths, allowing companies such as Paramount free reign to gobble up whatever lies in their paths like an old-school Pac-Man.

Our president personally invests in industries he’s supposed to regulate (I’m looking at you, Silicon Valley). Corporations dump money into elections that average people can never hope to match. The free press is under increasing attack with multiple outlets banned from the White House — including CNN, which Paramount hopes to own along with CBS and whose editorial independence is at least addressed in this settlement, albeit weakly.

States, even powerful states such as New York and California, don’t have the muscle or money of the federal apparatus, and were never meant to play the role of national enforcer on issues such as these.

The fact that Bonta and the 11 other states involved in the antitrust litigation pulled together not just a credible, but effective team is a victory for all American consumers, and a message to other Pac-Man companies out there that even if federal regulation is on life support, there are still rules.

The states “showed that they could quickly and effectively put together a formidable litigation team, and achieve significant initial success. That’s a big deal. That that changes the role of the states for a long time into the future,” said William Kovacic. He’s a law professor at George Washington University and a former chair of the Federal Trade Commission, so like Hay, he knows a bit about antitrust enforcement.

“This has a ripple effect that goes through the entire federal enforcement system because they showed they could do something that was very difficult,” Kovacic said. “That’s a big institutional win for the states.”

To hear Bonta describe it, California is absolutely a winner in its own right, though, and this will be “very good” for the state. Which to be fair, is exactly what any decent politician would say.

“It will be good for consumers, good for prices, good for jobs, good for choice, quality, competition,” Bonta told me Monday afternoon.

Kovacic is a bit more measured, calling it a “modest win.”

The deal has many parts, but it covers a five-year period in which the new Paramount mega-studio must release between 30 to 32 films each year, many in theaters and some independent. It also has to keep open and running both the Paramount and Warner Bros. lots, a not-insignificant source of L.A. jobs — and maybe one of the most visible wins for the city.

The new company also must spend at least $1.5 billion over the five years on production in the U.S., and increase that figure if there are certain, uncapped federal or state tax credits available to them.

In California, where the budget deficit is in the billions, creating uncapped credits may be a hard sell, but Bonta told me he’s making it a priority in the next legislative session and will push the next governor — likely Xavier Becerra, who once held his job — to back them.

“I think we’re going to get it in California,” he said. It’s somewhat important because the settlement doesn’t specifically address production in California — and tax credits from other states have been drawing production away for years.

We’ll see how successful Bonta is on that endeavor — he hasn’t always gotten what he wants from governors.

Much has been made about the recent threats from Paramount Skydance Chief Executive David Ellison to move business operations out of California. That pressure has been cited as one of the factors pushing the state to settle, and it probably was — but not just because of Ellison.

Gov. Gavin Newsom made it clear that he preferred a settlement to a drawn-out court case, especially after that threat.

You may recall our governor has presidential aspirations, and is in a long-running battle with Trump over whether California is a wasteland for business beset by fraud and regulation, or a utopia of economic activity fueling the world’s fourth largest economy. Paramount reupping its threat to leave, or even worse, decamping for someplace such as Nashville, is not a great look.

So this case, which was never going to be a slam-dunk to win in court and which could easily have run into 2028 if it proceeded, was never a winning issue for Newsom.

Newsom Monday called the deal “a practical path forward,” which it definitely is — for him.

Hay, of Cornell, said it was a “big blow” when the governor failed to back Bonta and go all-in on litigation.

“Once [Newsom] once came out on the other side, it made things really, really difficult,” Hay said.

So there was pressure on Bonta to make a deal even from his friends, though Bonta told me that “what you call pressure was just noise to me. I never felt pressured in this process.”

But of course, nearly everything that happens in politics and litigation is about pressure — who has the power to apply it and who has the power to withstand it. Bonta, to his credit, applied pressure where Paramount never expected it.

“If I were in California, I’d be proud of the attorney general. At the end of the day, he got the best he could,” Hay said. “I’m glad they were there when the government bailed out because it made Paramount tow the line, and maybe that’s all that we could hope for.”

The Paramount settlement is more about possible than perfect, but it proved that states — and consumers — are not powerless, and every brawl that proves that is, as Hay said, a fight worth fighting.

The Federal Communications Commission on Thursday granted Paramount Skydance’s request to allow Middle Eastern royal families to hold a substantial stake in a merged Paramount-Warner Bros. Discovery.

The sovereign wealth funds of Saudi Arabia, Qatar and Abu Dhabi are slated to indirectly own nearly 50% of the equity in David Ellison’s proposed mega-studio, Paramount-Warner Bros. That will give them a hefty stake in CBS, CNN, Comedy Central, HBO and two historic Hollywood film studios.

Ellison needed FCC approval because the deal will change the ownership structure of CBS.

As part of the Communications Act of 1934, Congress placed restrictions on foreign ownership of broadcast outlets because of concerns about national security. Current rules prevent foreign investors from owning more than 25% of a company that holds a U.S. broadcast license — unless the FCC determines that foreign ownership would serve a public interest.

CBS owns more than two dozen TV stations with FCC licenses, including KCBS-TV Channel 2 and KCAL-TV Channel 9 in Los Angeles.

“Upon review of [Paramount’s] Petition and consideration of the record of this proceeding, we find that the public interest would be served by granting the Petition,” FCC said in its ruling, noting that Paramount has said the proposed ownership changes would “not result in a transfer of control of Paramount.”

Instead, “Ellison family will retain a majority of the voting interests and control of Paramount,” the FCC said.

FCC Chairman Brendan Carr, an appointee of President Trump, has been supportive of Paramount’s takeover of Warner Bros. Trump and his lieutenants, including Defense Secretary Pete Hegseth, have been cheering for Ellison to control CNN, a Warner property.

Anna M. Gomez, the lone Democratic FCC commissioner, slammed the agency’s decision, saying it “just let some of the most repressive governments in the world indirectly control nearly all of a combined Paramount-Warner Bros.”

“An investment this large in one of America’s biggest media companies doesn’t just buy equity, it secures influence over what gets said and what gets made,” Gomez said. “That’s why I called for this new and novel issue to go to a full commission vote given what’s at stake. Instead, the FCC snuck this ruling out as a staff-level decision, with no public vote and no accountability for a call of this magnitude.”

Ellison’s billionaire father, Oracle co-founder Larry Ellison, in February agreed to personally guarantee the $47 billion in equity needed to buy out Warner Bros. Discovery’s existing shareholders for $81 billion. Ellison and longtime Skydance investor, RedBird Capital Partners, then entered into agreements to assign some of their purchase rights to the sovereign wealth funds.

The funds plan to invest $24 billion in the Paramount-Warner deal. Saudi Arabia’s Public Investment Fund is set to contribute $10 billion while the Qatar Investment Authority and Abu Dhabi’s L’imad Holding Co. will separately add $7 billion.

Paramount has separately lined up debt financiers to help pull off the leveraged buyout of Warner Bros. Discovery — Hollywood’s biggest merger in decades. The deal has been stalled by an antitrust challenge brought by California Atty. Gen. Rob Bonta and 11 other Democratic attorneys general, representing such states as New York, New Jersey, Colorado, Nevada and Oregon.

The foreign ownership rule was adopted nearly a century ago because members of Congress wanted to make sure that hostile foreign players were barred from using U.S. airwaves to spread propaganda, particularly in times of war.

“We appreciate the FCC’s careful review and are pleased that it has granted Paramount’s petition,” Paramount said in a statement, adding the Trump administration’s Committee for the Assessment of Foreign Participation in the United States Telecommunications Services Sector had separately recommended approval of the deal, subject to several conditions to protect the data of the company’s U.S. based consumers.

Paramount said that, once the deal closes, the Ellison family and RedBird would “collectively hold the largest equity stake in the combined company and 100% of the voting shares, with no other equity participant having any governance rights.”

Paramount has two classes of stock — an ownership structure that will be replicated in a merged Paramount-Warner Bros.

The Ellison family owns 77.5% of Paramount’s voting Class A common stock. RedBird indirectly holds the remaining 22.5% of the Class A shares. The Ellison family separately has 40% of the non-voting Class B shares.

“At a time when the media industry faces unprecedented competitive pressure from dominant big tech companies, a combined Paramount-WBD will have the scale and resources necessary to compete, invest, innovate, and deliver premium content to audiences worldwide,” Paramount said in its statement.

Fox Corp.’s $22-billion acquisition of San José-based Roku, operator of streaming services and seller of hardware devices, seemed like a straightforward deal when it was announced in June: A growing media company was looking to bolster its presence in the fast-growing streaming industry.

But, on Wednesday, the Trump administration weighed in.

Fox Corp. and Roku said that the companies received requests from the Justice Department on Tuesday for additional information in connection with its review of the merger.

While Fox and Roku downplayed the requests, saying that they had expected the outreach, the timing of the move raised eyebrows among some analysts, who said it could signal further scrutiny of the transaction by the Justice Department.

“The president has been outspoken on the fact that he will take retaliatory action against networks that say things that he doesn’t agree with, or they do things that he doesn’t agree with,” said Rob Enderle, principal analyst at advisory services firm Enderle Group.

The action follows President Trump’s surprise over Fox’s ouster of anchor Maria Bartiromo. She was pushed out after she had shared internal company texts with the White House, which sources told The Times may have been the breaking point.

Trump said on social media that he couldn’t believe that Bartiromo will no longer have her shows on Fox. “Her fans, of which there are many, will not be happy,” he wrote on Truth Social on Sept. 3.

Associate Atty. Gen. Stanley Woodward said the Justice Department could not comment on pending matters but said in a statement: “We can affirm that this DOJ under President Trump’s leadership will continue to prioritize affordability for all Americans across our economy.”

Fox announced in June its plans to acquire Roku for $22 billion, which would give the company access to Roku’s 100 million households that use its platform to connect to different streaming services. The deal would benefit Fox’s advertising business, as well as make it less reliant on traditional pay TV platforms.

Fox and Roku said they expect the merger to be done by the first half of 2027, subject to regulatory and shareholder approval, according to a Sept 9 filings with the U.S. Securities and Exchange Commission.

“FOX and Roku will continue to work cooperatively with the DOJ in its review of the Mergers,” Fox said in its filing.

Some legal experts said it is fairly standard for the Justice Department to make an additional request for information.

“It doesn’t mean that their review is going to be more extensive than usual,” said Ray Seilie, an entertainment attorney at law firm Kinsella Holley Iser Kump Steinsapir.

For example, the Justice Department made a second request for information when it reviewed Paramount Skydance’s deal to buy Warner Bros. Discovery, he said. The merging companies typically send information that helps the government figure out what the market impact will be of a merger, he added.

The Justice Department ultimately approved Paramount’s planned acquisition, despite opposition from some industry stakeholders. State attorneys general and the Writers Guild of America have sued Paramount over the deal, raising antitrust concerns. Others have pointed out close ties between Trump and Larry Ellison, a financial backer of the deal, who has also donated money to a group that supports Trump. Ellison’s son, David, is chief executive of Paramount Skydance.

Legal experts and analysts said they don’t think the combination of Fox and Roku raises antitrust issues because they are not dominant players in streaming and have businesses that complement each other.

But one wild card is Trump.

“You never know what Trump is going to seize on and decide he wants to do,” said Bryan Sullivan, a partner with law firm Early Sullivan Wright Gizer & McRae on whether Trump will take retaliatory action through the Justice Department in the Fox-Roku deal. “It’s chaos in the federal government and it could very well happen because of that reason, but it could also just be a blip and not a big deal.”

Times staff writer Stephen Battaglio contributed to this report.

A prominent Latino group is raising fresh concerns about Paramount Skydance’s proposed acquisition of Warner Bros. Discovery, saying the blockbuster deal would crush Latino workers and small businesses that support Hollywood.

In an open letter to California Atty. Gen. Rob Bonta, the League of United Latin American Citizens urged the state’s top prosecutor to continue his legal fight to block Paramount’s proposed $111-billion takeover of the media company that owns HBO, CNN, HGTV and the Warner Bros. film and television studios.

“No state has more to lose from this disastrous merger … than California,” LULAC National President Roman Palomares and Chief Executive Juan Proaño wrote in the six-page letter sent to Bonta late Sunday.

Thousands of jobs would be lost, and Latino voices could be squelched should the deal go through as it is drawn, the LULAC leaders said.

“The current form of the consolidation would have a devastating and unacceptable impact on Latinos, including those who reside in the Los Angeles community,” they wrote, noting Latinos make up 40% of the state’s population and nearly half of Los Angeles County, where HBO and the Paramount and Warner Bros. studios are based.

At least 4,500 jobs in Southern California would be lost if the merger goes through, according to a 120-page report last week from Los Angeles County’s economic office.

Paramount’s proposed merger has carved deep divisions and become increasingly contentious.

In recent days, Gov. Gavin Newsom, Los Angeles Mayor Karen Bass and Democratic gubernatorial nominee Xavier Becerra publicly pressured Bonta to settle the lawsuit to avoid a drawn-out court fight.

Politicians have been reacting to Paramount’s threat to move its studio, and potentially Warner Bros., from Hollywood to Tennessee or Texas unless Bonta backs down.

Theater owners and two major Hollywood unions — the Directors Guild of America and the International Alliance of Theatrical Stage Employees — have joined the parade pleading for a settlement. But the Writers Guild of America and Teamsters have steadfastly opposed the merger, warning about its potential impact on working writers and film crews.

Paramount Chief Executive David Ellison was set Monday to meet Bonta and others representing the 12 states that sued to block the transaction. But Bonta abruptly canceled the mediation session, accusing Paramount of “playing games,” leaking details and making misrepresentations about the talks despite agreeing to keep them confidential.

Paramount later denied that it was the source of the leaks.

Paramount didn’t immediately comment on the LULAC letter, but previously has touted the merger as a way to build a stronger competitor amid a pullback in local production. The company said it would “invest $30 billion annually in production and release at least 30 films a year,” a commitment that would lead to “more jobs over time, and ultimately, a stronger, more durable entertainment industry for generations to come.”

“To have it thrown in your face that Paramount will leave Los Angeles if they don’t get what they want is really just tantamount to a threat … one that will be devastating to Latinos,” Proaño said in an interview with The Times.

“There is a significant number of small businesses — Latino small businesses — and Latino residents, employees and workers that support this industry,” Proaño said. “We’ve been invisible, we’ve been silent — but we wanted to make sure that LULAC is not silent in this moment.”

In its letter, LULAC pointed to Hollywood’s most recent mergers, including Discovery’s 2022 acquisition of WarnerMedia from AT&T, saying such tie-ups underscore how media consolidation tramples over Latino voices, particularly when companies resort to job eliminations and other cost cuts to balance the expense of a corporate takeover.

After Warner Bros. Discovery Chief Executive David Zaslav took the helm, his company plodded through years of turmoil and massive layoffs. The movie “Batgirl,” which was set to feature a young Afro-Latina as lead actor, was shelved to gain tax benefits. Warner also canceled “Gordita Chronicles,” a TV show about an immigrant Dominican family, despite solid viewership.

Latino families make up “a significant portion of the film and television industry audience,” the letter said, adding that Motion Picture Assn. data show Latinos annually attend more movies per person in theaters than any other demographic group.

“Hollywood returns almost nothing for that loyalty,” the letter said. “Latino characters filled only 5 percent of speaking roles across 1,300 top-grossing films.”

“These and other harms are not collateral to the antitrust case,” LULAC’s letter said. “They are consequences of the diminished competition that will result. Every studio absorbed by a rival is one fewer buyer for a script, one fewer employer for a crew and one fewer distributor willing to bet on a story its franchise slate does not need.”

Warner Bros. Discovery nearly drowned in debt that it took on to finance its $43-billion buyout from AT&T in 2022. Ellison’s proposed Warner Bros. takeover also will be heavily leveraged with nearly twice the debt that resulted from Zaslav’s previous deal.

David Ellison has lined up nearly $80 billion in debt financing to buy out Warner investors. The tech scion is relying on a guarantee from his billionaire father, Oracle co-founder Larry Ellison, and $24 billion in equity financing from three Middle Eastern sovereign wealth funds, representing the royal families of Saudi Arabia, Qatar and Abu Dhabi.

The deal comes one year after the Ellison family bought Paramount, which had been on the ropes because of significant under-investment over the years.

“Paramount followed the same script: within months of closing its Skydance merger in August 2025, it laid off roughly 2,000 employees, about ten percent of its workforce, just after dismantling its diversity programs earlier that year,” the LULAC letter reads.

“This time, Zaslav’s going to walk away with a billion-dollar parachute and Paramount may end up with these crown jewels assets when it comes to movie-making and television programming,” Proaño said.