tegna

Is Paramount making a Tony Soprano move?

David Ellison’s media company appears to be girding for a big battle with California Atty. Gen. Rob Bonta and fellow state attorneys general who may team up to file a lawsuit aiming to block Paramount’s proposed $111-billion takeover of Warner Bros. Discovery.

Last week, Paramount hired powerhouse antitrust attorney Jeffrey Kessler to help defend its proposed takeover of Warner, which owns CNN, TBS, HBO and the prestigious Burbank film and television studios.

Kessler — co-executive chairman of Winston & Strawn in New York — is one of the nation’s top antitrust lawyers. He most recently led the state attorneys’ case against concert promoter and ticketing firm Live Nation, resulting in a monumental win for the states, including California.

Now Kessler may be on the opposite side, potentially going after the government to help Paramount build a behemoth that would include CNN and CBS News, two historic film studios and four streaming services.

The states have not indicated whether they plan to go to court to block Paramount’s takeover of Warner, but Bonta has said Ellison’s proposed consolidation, which is widely expected to lead to layoffs, is problematic.

Paramount declined Tuesday to discuss Kessler’s remit. Kessler was not immediately available for comment.

Hiring an attorney who is more commonly aligned against big companies prompted at least one observer to postulate that Paramount could be angling to remove a big name from the legal chessboard to prevent him from joining the other side, in the vein of TV mob boss Tony Soprano.

During the HBO show’s fifth season, Soprano spent months consulting with top divorce attorneys, creating a potential conflict of interest that prevented those lawyers from representing his wife Carmela in the dispute.

Attorney Jeffrey Kessler arrives at federal court in Oakland in a file photo.

(Noah Berger/Associated Press)

Kessler also knows the ins and outs of a courtroom as well as antitrust settlements, which could benefit Paramount as it seeks to avoid a bruising court challenge.

More than 5,000 artists and other entertainment industry workers already have signed an open letter that urges Bonta to take action to upend the Paramount and Warner Bros. deal.

Ellison and his team have vowed to make $6 billion in cuts following the merger. The combined company would have to contend with $79 billion in deal debt.

Adding Kessler comes as state attorneys general have been taking a more aggressive role in waging anti-trust fights. Many believe the U.S. Justice Department has been sitting on the sidelines to allow deals favored by President Trump to sail through their legally mandated regulatory reviews.

Trump favors Paramount’s takeover of CNN and other Warner properties.

Paramount Chief Legal Officer Makan Delrahim has made several savvy tactical moves since joining Ellison’s Melrose Avenue firm last fall.

Delrahim, who was Trump’s antitrust chief during his first term, filed paperwork to win the U.S. Justice Department’s blessing in December — soon after Netflix had clinched the bidding war for Warner Bros.

Netflix ultimately bowed out of the auction in late February. And Delrahim’s move gave Ellison’s Paramount a head start in the regulatory approval process.

The company is waiting for confirmation that the Justice Department will consent to its Warner Bros. purchase. It is separately responding to issues raised by regulators in Europe.

It’s not clear when Bonta or his fellow attorneys general might decide whether to bring a case against Paramount, although the deadline is approaching because Ellison wants to get his deal wrapped up by September.

Attorneys general also could opt for negotiating a settlement agreement with Paramount, which might be willing to bend to concessions to get the deal approved.

Bonta is leading a challenge against another big merger — TV station owner Nexstar Media Group’s $6.2-billion purchase of rival company Tegna Inc. Nexstar owns KTLA-TV Channel 5 in Los Angeles and more than 100 other stations.

Nexstar initially argued that Bonta’s action came too late — after Nexstar had gained its federal approvals for the deal. Nexstar also was in the process of consolidating Tegna’s operations and top Tegna executives had cashed out.

The move backfired on Nexstar as a federal judge in Northern California issued a preliminary injunction, ordering Nexstar to halt the Tegna consolidation.

U.S. District Judge Troy Nunley ruled Tegna must be managed as a separate company pending the outcome of a trial.

On Tuesday, Tegna announced that it hired a former Fox TV station executive, Patrick Paolini, as its chief executive. Beginning next week, Paolini will be responsible for “Tegna’s daily operations, revenue-generating business strategies, local journalism and production, and growth initiatives,” according to a corporate statement.

Paolini will report to Tegna’s board — not Nexstar.

California Atty. Gen. Rob Bonta has enlisted new allies in his legal battle to unravel Nexstar Media Group’s takeover of rival television station group Tegna Inc.

Late Thursday, Bonta announced that five additional states have joined his coalition that is suing to block the $6.2-billion merger. With the additional plaintiffs, the group of top state law enforcement officers has grown to 13 — and the campaign now is a bipartisan effort.

“Antitrust enforcement is not political — it’s about protecting working families and helping ensure the benefits of a vibrant economy are for everyone, not just well-connected corporations,” Bonta said in a statement. “We welcome our sister states into the fray and look forward to fighting alongside them.”

The new states are Indiana, Kansas, Massachusetts, Pennsylvania and Vermont. They have joined existing the plaintiffs that represent the people of California, Colorado, Connecticut, Illinois, New York, North Carolina, Oregon and Virginia.

Nexstar owns KTLA-TV Channel 5 in Los Angeles.

U.S. District Judge Troy Nunley two weeks ago granted a request by the attorneys general to issue a preliminary injunction halting the merger as the legal case proceeds. The proposed merger — which Nexstar rushed to complete despite opposition from the states — would create the nation’s largest broadcast station group with 265 television stations, up from 164 that Nexstar currently controls.

In dozens of markets, including San Diego and Sacramento, Nexstar would own multiple major TV network affiliates. That duplication has raised concerns about staff consolidations and widespread newsroom layoffs.

“State attorneys general nationwide understand just how important robust antitrust enforcement is to American life — and what a rotten deal this is for consumers, for workers, for affordability, and for our local news,” Bonta said.

El Segundo-based DirecTV separately filed a lawsuit to block the deal, saying the Nexstar-Tegna consolidation would harm their business by forcing DirecTV to pay significantly higher fees for the rights to carry their stations as part of its programming lineup.

A Nexstar representative was not immediately available for comment.

Nexstar contends the deal would strengthen TV station economics, allowing stations to bolster their news gathering and expand the number of newscasts. But DirecTV countered that in markets where Nexstar owns two stations, it relies on just one newsroom to program both channels.

Nexstar’s proposed purchase of Tegna would give the Irving, Texas-based Nexstar stations in 44 states covering 80% of the U.S. population.

The federal judge ruled there was sufficient merit in the antitrust arguments brought by Bonta and the others to pause Nexstar’s takeover of Tegna until a trial can be held to decide whether the merger is illegal.

“Nexstar must permit Tegna to continue operating as a separate and distinct, independently managed business unit from Nexstar,” Nunley wrote in his 52-page order on April 17. “And Nexstar must put measures in place to maintain Tegna as an ongoing, economically viable, and active competitor.”