The US Department of Justice has approved the $111bn merger of Paramount Skydance, controlled by the Ellison family, and Warner Bros Discovery, parent company of CNN and HBO. The decision came after months of review, despite concerns from entertainment and media industries about reduced competition and potential merging of CBS News and CNN.
Justice Department's Decision
The agency stated on Friday evening that its investigation determined the transaction is not likely to harm competition or American consumers in streaming video on demand, linear television, or studio film production and distribution.
Remaining Hurdles
While the US approval is a major win, the deal still faces scrutiny. The UK Competition and Markets Authority opened an investigation this week, with an August 7 deadline to decide on a more in-depth review. European regulators are also investigating the funding from three Gulf sovereign-wealth funds that committed $24bn. Both reviews have July deadlines.
Paramount's Response
Paramount denied the lessening of competition, calling the deal pro-competitive and positioning the combined company to better compete against dominant tech platforms. The company aims to complete the transaction quickly to benefit consumers and the industry.
International Approvals
Australia approved the deal on Tuesday, determining it is unlikely to substantially lessen competition in the wholesale supply of films for theatrical release. Several other countries have also cleared the merger.
Concerns from Journalists
Journalists at CBS News and CNN fear a merger could lead to significant job cuts, with $6bn in synergies promised. Some CNN staff worry about editorial direction under David Ellison and his father Larry, a Trump associate, though David Ellison pledged CNN's editorial independence. Speculation suggests Bari Weiss could be put in charge of the cable network.
Potential Legal Challenges
A coalition of US state attorneys general may file a lawsuit to block the merger, led by California Attorney General Rob Bonta, who stated the deal remains under investigation. The Justice Department noted an eight-month investigation involving over two million documents.
Criticism of the Approval
Opponents criticized the decision, with Free Press co-chief Craig Aaron calling for state attorneys general to take action. Senator Elizabeth Warren described the approval as terrible news, alleging corruption and influence-peddling by Trump-aligned billionaires.
