Paramounts

The U.S. Justice Department has cleared the way for Paramount Skydance’s $111-billion purchase of Warner Bros. Discovery — a major milestone that moves David Ellison closer to his goal.

After a months-long review, Justice Department antitrust regulators on Friday concluded the combination would not violate federal anticompetition laws. Approval had been expected because President Trump — who has friendly ties with Ellison and his father, tech billionaire Larry Ellison — favors the deal.

The government stopped short of asking Paramount to make concessions or divestitures.

Buying Warner Bros. would allow Paramount — Hollywood’s smallest major company — to bulk up with such prestigious properties as HBO, CNN, HGTV and Food Network. Those would be combined with properties Paramount already owns, including CBS, Comedy Central, Nickelodeon and MTV.

The deal would put two historic film studios and two prominent news organizations under the same roof. It would give Paramount four streaming services, including HBO Max, and dozens of cable channels.

In its four-page closing statement, the Justice Department emphasized that career antitrust regulators — not political appointees — had performed a rigorous review, sifting through some two million documents the government received from dozens of sources, including third-party organizations.

They conducted meetings and deposed senior-level executives and other witnesses.

“These investigative efforts all led to the same conclusion: the film and television industry is highly dynamic, and the proposed transaction is not likely to harm competition or American consumers,” Justice Department regulators wrote in their summary.

Regulators zeroed in on three potential areas of concern. They looked at whether the merger would give Paramount too much power in the streaming video-on-demand market; the traditional linear television channel space; as well as in “studio development, production, or distribution of films for theatrical release,” the Justice Department said.

Competition in streaming would not be crimped, according to the regulators.

“To the contrary, the combined firm is likely to increase competition by offering consumers a more robust competitive alternative to the larger [streaming] offerings,” they wrote.

The antitrust division also found that theatrical distribution and opportunities for creators, including writers and actors, would not be harmed as long as the combined company maintained current production levels.

Ellison has promised to continue releasing 30 films a year with a combined Warner Bros.-Paramount studio. He also has said he would protect the HBO brand.

The proposed merger is controversial because many in Hollywood fear it will bring thousands of job losses, which was the result of past consolidations, including Walt Disney Co.’s 2019 takeover of Fox entertainment properties. More than 5,000 entertainment industry workers, including Jane Fonda, J.J. Abrams, Javier Bardem and Mark Ruffalo, have signed an open letter calling for the merger to be blocked.

There’s a political dimension as well. Paramount’s standing with the Trump administration (Paramount+ is set to televise Sunday’s UFC fight spectacle at the White House to celebrate Trump’s birthday as part of the company’s relationship with the UFC) has given left-leaning groups pause.

They worry about collapsing CNN and CBS News into one unit, particularly after all the turmoil that has ensued at CBS News since the Ellison family bought Paramount in August and installed Bari Weiss as CBS News editor in chief.

This month witnessed a dramatic shakeup at the iconic “60 Minutes,” with top executives and three well-known correspondents tossed out.

“We’ve already seen how far Paramount and the Ellison family are willing to go to diminish a once-proud network and news organization like CBS,” Craig Aaron, co-chief executive of the progressive group Free Press, said in a statement. His group fears the Ellisons would “do worse if they get their hands on Warner Bros., HBO, CNN and all the rest.”

Paramount, for its part, said it was grateful for “the Department of Justice’s thorough review of this transaction, as well as the work of the other agencies that have completed their reviews and provided clearance to date.”

“This deal is pro-competitive, resulting in a stronger company better positioned to compete against dominant technology platforms in an industry increasingly defined by intense competition for audiences, talent, technology, and investment,” Paramount said. “We remain focused on completing the transaction as soon as possible and delivering its benefits to consumers, creators, and the entertainment industry as a whole.”

Paramount wants to finalize its purchase by September.

With Friday’s victory, Paramount is staying on that timetable, but regulators in Europe and Britain have opened their own regulatory investigations and are expected to make their own determinations in the coming months.

Separately, California Atty. Gen. Rob Bonta and other state attorneys general have been scrutinizing the proposed merger, and are widely expected to file a lawsuit, perhaps as early as this month, to try to block it.

Paramount applied for Justice Department approval in December — more than two months before it edged out Netflix in the Warner sweepstakes.

In its statement, the Justice Department said it began its review last fall when it was clear Warner Bros. was in play. Regulators said they were familiar with Warner’s businesses, because the division had scrutinized four other mergers involving the company, dating back to the disastrous AOL-Time Warner merger in 2001.

Paramount’s deal would mark the third time Warner has changed hands in the last decade. AT&T bought the company in 2018 and then sold it to the smaller Discovery four years later. That deal left Warner Bros. burdened by debt, setting the stage for the Ellison takeover.

Justice Department approval could complicate efforts by Bonta and other state attorneys general to block the deal. Should Bonta or others sue, they would have to convince a judge that the nation’s top antitrust regulators failed to make a proper finding despite their lengthy review.

That may pose a high bar for the state officials, who are facing political pressure to stop the deal.

“State AGs must block this merger,” U.S. Sen. Elizabeth Warren (D-Mass.) said in a statement Friday, adding that the Justice Department’s approval was “terrible news for every American who doesn’t want Trump-aligned billionaires to control what they watch and how much they pay.”

The Justice Department said state attorney general offices had participated in its investigation, which allowed federal and state officials “to share information with each other and for the States to attend and participate in the [antitrust] Division’s depositions.”

Last month, David Ellison appeared before the regulators in a two-hour session.

Paramount’s Chief Legal Officer Makan Delrahim, who previously served as the nation’s top antitrust regulator during the first Trump administration, also was busy quarterbacking Paramount’s outreach with regulators.

Paramount Chief Executive David Ellison has been circling the globe, meeting government regulators who will ultimately decide the fate of his controversial $111-billion takeover of Warner Bros. Discovery.

Last week, Ellison spent two hours answering questions from U.S. Justice Department antitrust lawyers in a bid to secure a key government approval — one that few people believe is in doubt because of President Trump’s strong support of tech billionaire Larry Ellison and his son’s ambitions to amass more power.

Throughout his travels, David Ellison has been accompanied by a savvy wingman: Makan Delrahim.

Delrahim, Paramount’s chief legal officer, served as the nation’s top antitrust regulator in the Justice Department during Trump’s first term. The 56-year-old Iranian American, who grew up in Los Angeles, is the architect of shrewd moves that have brought Paramount within reach of its blockbuster merger that would redefine Hollywood.

Politics have permeated the process — even before Trump announced he would get involved. Opponents have been suspicious of the Ellisons, given the family’s ties to Trump and programming changes to redefine Paramount’s CBS, including last month’s departure of late-night comedian Stephen Colbert and a shakeup at “60 Minutes,” CBS’ newsmagazine.

Buying Warner Bros. Discovery would give the Ellisons control of both CBS News and CNN.

Paramount’s bid for Warner Bros. has sparked dread in Hollywood for another reason, too: Thousands of jobs already have vanished through a string of media mergers.

More than 5,000 artists and entertainment industry workers have signed an open letter, calling on California Atty. General Rob Bonta to try to block the deal on antitrust grounds.

In an interview with The Times, Delrahim responded to concerns and criticisms. This interview has been edited for length and clarity:

Where does the regulatory process stand?

We are still going through the regulatory approval process. We actually started planning for the regulatory approval filings last summer. We knew we were going to be pursuing this transaction but it took a few months longer to sign the transaction than we thought. There were some interveners [Netflix, Comcast], but we planned ahead.

Do you have a commitment from Trump or his administration that you’ll get a thumbs up?

There are no deals with the president. We have a deal with the Warner Bros. shareholders. We’ve submitted [applications] to the governments of Europe, Canada, U.K. and the U.S., and that’s where it is.

You got a head-start because you filed a regulatory approval in December — months before Paramount had a deal with Warner. Why so soon?

We were always very skeptical [the Netflix deal] would ever go through. The only way to really show the [Warner] board that our deal would get through — because it doesn’t have antitrust problems — was to move as fast as we could.

One of the benefits being a former [DOJ] enforcer and having a team of outside lawyers who are also former colleagues and enforcers was that we anticipated what the government would ask for. Those were questions that we would have asked, and so we provided those answers.

Your timeline is aggressive. Some suggest Paramount wants this deal done before the mid-term elections.

I don’t think it’s aggressive. It has nothing to do with the midterms. The midterms do not change the officials at the Justice Department or the FCC — we have that minor application there. The midterms have no effect on the European Commission or anybody else. We’ve been very transparent and proactive with members of Congress and with the state attorneys general and the federal authorities.

Are you preparing to defend a potential antitrust challenge from Atty. General Bonta?

Well, no matter what field you’re in, whether it’s antitrust or whether you’re preparing for a football game, you always prepare the best you can for the worst, and you hope it never gets there. So, we’re preparing for challenges from anybody and everybody. But I don’t think any serious antitrust enforcer who looks at the facts, the law, the economics of this transaction will see an antitrust violation.

Why are you so confident?

There’s no element of this merger that is anti-competitive. Once you look at it, it’s incredibly pro-competitive. It increases output, it increases jobs, and it lowers the cost to the consumers. If you actually try to block this deal, you’re going to harm consumers, you’re going to harm creative talent, because you’re going to harm the creative ecosystem — the vision that David [Ellison] is trying to deploy here. It’s transformative from the efficiencies that it creates.

David Ellison has promised to release 30 films a year. Was that commitment to show that this merger will not be a repeat of Walt Disney Co.’s 2019 purchase of Fox?

I’m quite familiar with that one because I was at the Justice Department and reviewed it. Disney-Fox was a transaction with a different thesis. Disney wanted to get into streaming and they wanted to get scripted series. It wasn’t about studios trying to increase output.

Our transaction, as David has described, is motivated to create more content to feed the theaters, then streaming. We have a natural economic incentive to create more content. We’ll still be in fourth place after this transaction on the streaming side — almost half the size of Netflix.

David Ellison hasn’t made any commitments on the television side or pledged pledge to keep the various TV studios intact. Why?

I don’t think there’s much of an overlap on the television studios. Look, you have incredible studios in HBO, Warner Bros. Television, certainly our own studio. We’re not paying money to limit supply. It’s the exact opposite.

There is overlap between CBS News and CNN. How are regulators looking at that issue?

We’re very proud of CBS News and hopefully CNN, post-transaction. There is very limited overlap. Why? Because CBS News only airs a few hours a week of programming whereas CNN is 24/7, and it has international reach.

Antitrust regulators are going to see that it’s going to create synergistic effects. You might be able to cross-program and more people will be exposed to the incredible programming of CBS News. They’ll benefit from each other’s independent strengths.

During the first Trump administration, you said merger conditions were problematic because it’s difficult for the government to enforce behavioral remedies. Has your thinking changed?

No, I’ve been quite consistent. If there’s an antitrust problem, you need a divestiture [selling assets]. I don’t think there’s a remedy needed in this transaction. But having said that, we’re happy to engage with regulators to discuss where they see a problem and a possible solution. We’re always wanting to engage in constructive dialogue.

Would Paramount spin off CNN?

I don’t see that. I can’t see any antitrust reason to do so. That would be a weaponization of the antitrust law, and that would not be appropriate.

Many people in Hollywood view the merger with trepidation because of the prospect of more job losses. Others see it through a political lens. How do you evaluate the politics?

Politics is part of life. It’s part of the beautiful process of democracy. Generally, we are very empathetic to the folks in Hollywood, but this transaction will actually create more and better and exciting jobs. David is an absolute lover of films; he’s a filmmaker himself. For the first time, you are getting an owner who comes from the creative side.

Let’s be honest. There’s a lot of fear-mongering, particularly from people in Washington, D.C. They are running a political campaign. Some of these people are trying to inflict harm on this transaction really because of their own antisemitic views. Regulators and law enforcement officials will see right through that.

Do regulators share others’ concerns about the merger debt — $79 billion — for the combined company?

Some regulators appropriately have asked about it. They say: ‘This is what we have heard, that you guys are not going to be around because of this debt,’ which is just silliness. David and his family are owner-operators. They’re not rented CEOs. They have over 50% ownership. They put their money at stake and my money is on them.

Paramount Skydance Chairman David Ellison defended his commitment to release 30 movies a year once his media company swallows Warner Bros. Discovery — a goal that some industry observers view as overly ambitious.

During a Monday call with analysts to discuss Paramount’s first-quarter earnings, the tech scion said the target was achievable because his management team would maintain current levels of production. Paramount has doubled its film release capacity to 15 films this year, matching the number of theatrical releases planned by competing Warner Bros.

“The two companies are actually making 30 films to date,” Ellison said. “We really view our pending acquisition of Warner Bros. Discovery as a powerful accelerant to our strategy.”

The company said it was on track to finalize its Warner takeover by the end of September. The $111-billion deal would transform the smaller Paramount into an industry titan with prestigious programming, including Harry Potter, “Game of Thrones,” “Euphoria,” as well as its current slate of Taylor Sheridan-produced franchises, including “Yellowstone” and “Landman.” The combined company also would own dozens of popular TV networks, including CBS, CNN, Comedy Central, Food Network and HGTV.

But the proposed merger would saddle the combined company with $79 billion in debt, stoking fears that Paramount would need to make steep cost cuts to balance such a large debt load. During the quarter, Paramount lined up banks and other institutional investors to provide bridge financing to help pull off the transaction, the company said.

“We’re pleased with the momentum and will continue to take the necessary steps to bring this deal to completion,” Ellison told analysts.

Late last month, Warner Bros. Discovery stockholders overwhelmingly voted in favor of the deal, which will pay $31 a share to Warner investors. The company now must secure regulatory approvals in the U.S. and abroad, and that process is well underway, Paramount said.

Paramount has asked the Federal Communications Commission for permission to exceed a cap on foreign ownership for U.S. media companies. Ellison’s company is expecting $24 billion from three Middle Eastern royal families, who would become part owners of the combined entity. Those total funds will represent about 49% of equity in that new company, exceeding the current foreign ownership cap of 25%.

More than 4,000 filmmakers, actors and industry workers, including Bryan Cranston, Connie Britton, Kristen Stewart, Jonathan Glazer and Jane Fonda, have signed an open letter asking California Atty. Gen. Rob Bonta and other regulators to block the deal, saying it “would reduce the number of major U.S. film studios to just four.”

Late last week, a small group of consumers sued to block Paramount Skydance’s acquisition of Warner Bros. Discovery and unwind Ellison’s Skydance Media’s takeover of Paramount, alleging that both deals reduce marketplace competition.

For the January-March quarter, Paramount’s earnings beat Wall Street’s expectations. Revenue grew 2% to $7.3 billion compared with the first quarter of 2025.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) reached $1.1 billion, helped in part by growth in its streaming services unit. Paramount+ increased its revenue by 17% to nearly $2 billion, compared with the year earlier period when it generated $1.7 billion. The service added 700,000 subscribers, bringing the total to nearly 80 million.

With Warner’s HBO Max streaming platform, the combined service would boast more than 200 million subscribers.

Paramount reported first-quarter net earnings of $168 million, or 15 cents per share, compared with $152 million in 2025, which occurred before Skydance acquired the media company in August.

Executives pointed to “Scream 7,” a late February release that has topped $200 million in global ticket sales, as a success story. Studio revenue grew 11% to $1.28 billion for the quarter.

Television networks revenue declined 6% to $3.7 billion as Paramount’s cable channels continue to contend with the loss of cable cord-cutters, which reduces the company’s collections from pay-TV providers. Nonetheless, Paramount pointed to the strength of Sheridan’s “Landman,” starring Billy Bob Thornton, Ali Larter, Sam Elliott and Demi Moore, and the strength of the CBS television network, which currently has 13 of the broadcast industry’s top 20 prime-time shows, including “60 Minutes,” “Marshals,” and “Tracker.”

The company told analysts it would achieve $30 billion in revenue for the full year and $3.8 billion in adjusted EBITDA. Paramount said it would also make $2.5 billion in cost-cuts by the end of this year and reduce expenses by $3 billion in 2027.

Paramount said it ended the quarter with $1.9 billion in cash and cash equivalents. It also was carrying $15.5 billion in debt. The company had to draw $2.15 billion from its revolving credit facility to pay Netflix a $2.8-billion termination fee that Warner Bros. Discovery had agreed to pay under a previous deal to sell the company to Netflix.

Paramount released its earnings after Monday’s trading day. Its shares closed at $11.13, basically unchanged.