A Biden-appointed federal judge scrutinized the proposed merger between Paramount Skydance and Warner Bros. Discovery during a court hearing on Thursday to make sure the negotiated settlement complies with federal antitrust law.
The virtual hearing came three days after California Attorney General Rob Bonta (D) announced that both sides had come to an agreement to clear all remaining legal roadblocks to the $111 billion transaction. The deal needs the court’s approval before the merger can close.
U.S. District Judge Araceli Martinez-Olguin, who presides over the Northern District of California, asked various questions about the consent decree that sought to shed light on how the parties arrived at the agreement earlier this week.
Paula Blizzard, who leads the antitrust division of the California Attorney General’s Office, assured the court and the public that the procedure was fair and that all 12 states had participated in settlement talks last weekend. She also suggested that the settlement was the best course of action instead of fully blocking the merger, which the California-led lawsuit sought to achieve.
The consent decree features five years’ worth of remedies to remove the competitive harms posed by the merger, Blizzard explained.
Among the terms that Paramount and Warner Bros. agreed upon are a joint commitment to release 30 theatrical movies per year for two years before upping the quota to 32 films per year for three years; a $30 million penalty for every unreleased movie that fails to meet the threshold; a $1.5 billion investment into production spending in California over the next five years; a fund for independent films; and an independent editorial board that oversees both CBS News and CNN.
Control over CNN’s future was not part of the lawsuits filed by the 12 blue states and the Writers Guild of America, but Democratic lawmakers and left-wing activists have been particularly concerned that Paramount CEO David Ellison would overhaul the Warner Bros.-owned news outlet in the same way he did to CBS News. Ellison’s father, Larry Ellison, is connected to President Donald Trump, who has not been covered favorably by CNN. The merger’s critics worry Trump would exert influence over CNN’s news coverage through Paramount.
It is unclear how the “editorial independence board” would operate at this time. The judge didn’t spend much time on that aspect of the consent decree.
Joshua Holian, an antitrust lawyer representing Paramount, sided with Blizzard by arguing that the consent decree validated Paramount’s commitment to healthy competition in Hollywood. However, the two lawyers appeared to butt heads at one point during the hearing.
Blizzard insinuated that Paramount blackmailed California into negotiating a settlement by threatening to leave the state, a common talking point raised by Bonta. Holian directly disputed that accusation moments later. Paramount’s headquarters is staying in Hollywood for the foreseeable future, Ellison said on Monday.
Hours before the hearing, a flurry of court filings were entered into the docket. A group of civil rights and religious leaders and members of the Block the Merger coalition filed separate motions to provide amicus briefs opposing the merger. Judge Martinez-Olguin gave the concerned parties until the end of Thursday to submit the amicus briefs.
Sen. Cory Booker (D-NJ) notably wrote a letter to Martinez-Olguin on Thursday, urging her to “subject the proposed consent decree to an independent public-interest review before entering it.” The judge directed the defendants and plaintiffs to address the letter by 12 p.m. Monday. Booker has been a staunch opponent of the merger ever since it was announced this year.
Toward the end of the hearing, Blizzard said she respects the anti-merger voices but emphasized that the states are solely focused on enforcing antitrust law. In his own statement, Bonta stressed that he doesn’t agree with the critics’ objections.
“Certainly, they can say whatever they want, and if they want to engage directly in the case through appropriate filings, they may do that as well,” he told Politico. “So, while I respect and understand their perspectives, I don’t share them. But they are able to certainly — you know, with appropriate filings with the court — make their position known.”
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Martinez-Olguin did not provide a specific timeline for issuing a ruling on the settlement. Ellison previously said he expects to finalize the transaction in early October, barring any more obstacles.
If the combined Paramount-Warner Bros. entity violates the consent decree in any way, California and the other plaintiffs can bring the case to trial. A trial was previously scheduled for March 2027 before the settlement materialized.