DOJ clears Paramount’s $110 billion purchase of Warner Bros. Discovery without conditions
The TL;DR
DOJ Clears Paramount’s $110B Purchase of Warner Bros. Discovery without conditions. States led by California are preparing to sue to block it.
The US Department of Justice cleared the purchase of Warner Bros. Discovery of Paramount Skydance for $110 billion without requiring contract changes. The agency said the merger “it is unlikely to harm competition or American consumers” after an eight-month review of dishonesty.
The deal includes two of Hollywood’s five major studios. It joins Warner Bros. and Paramount Pictures, CNN and CBS, HBO and Paramount+, and dozens of cable networks. Paramount beat out Netflix in a bidding war to acquire the company. CEO David Ellison, son of Oracle founder Larry Ellison, met with top antitrust officials last month to argue that the merger would help Hollywood compete with Netflix, Amazon Prime Video, and YouTube.
DOJ approval was expected. The Trump administration has not sought to block a single merger, preferring settlements or unconditional approval. Larry Ellison’s closeness to Trump has drawn scrutiny but has not contributed to public opinion of the organization.
The deal has not been done. State lawyers led by California are preparing to file a lawsuit to block the merger on antitrust grounds. Their concerns centered on reduced competition for creative talent, fewer jobs, higher production costs, and less choice of audience. Hollywood actors, directors, producers, and writers also opposed this merger.
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The DOJ rejected the argument that the merger would limit the options of authors and content creators. “The need for creative and human resources is related to the motivations of groups to maintain or expand productivity,” said the center.” In other words, a large integrated company will produce more content, not less.
Paramount is already preparing for the merger. The company combines the technology stacks behind Paramount+, Pluto TV, and BET+ into one backend, creating a repeatable playbook for absorbing HBO Max after the deal closes. That technical integration is a very important part of the merger process, even if it gets less attention than the antitrust game.
If Paramount doesn’t close the deal by October, it faces a daily payment of nearly $6.9 million to shareholders. The federal lawsuits could delay the process, but analysts say Paramount is more likely to get approval from the government than Netflix would be, given the current administration’s position to agree to a merger.
“The deal is competitive, resulting in a stronger company in a better position to compete against dominant technology platforms,Whether merging two legacy media companies into one creates real rivals to Netflix and Amazon, or simply delays the inevitable decline of traditional Hollywood, David Ellison is making a $110 billion bet.
