Governor Gavin Newsom, a Democrat from California, on Wednesday refuted allegations that he exerted pressure on California Attorney General Rob Bonta regarding the settlement of an antitrust lawsuit. The lawsuit concerned the proposed merger between Paramount Skydance Corp. and Warner Bros. Discovery Inc.
Initially, Attorney General Bonta spearheaded a coalition of state attorneys general who filed a legal challenge against the massive $111 billion acquisition. This deal was originally anticipated to finalize in the third quarter of the current year. However, by Monday, Paramount announced that a settlement had been reached, thereby clearing the path for the merger to proceed.
Critics of the proposed merger have accused both Bonta and Governor Newsom of yielding to Paramount's demands following reports that suggested CEO David Ellison was contemplating relocating the company's headquarters outside of California if the deal did not materialize. Governor Newsom has explicitly denied these accusations.
“I didn’t pressure anybody,” Newsom told Axios’ Alex Thompson. “I made the point. I’ve made it very publicly and consistently and been reported maybe two or three hundred different ways that we, me, many folks, including the mayor, soon-to-be governor-elect [Xavier] Becerra and others, preferred, in the words of Rob Bonta himself, that he focus on getting this done at the boardroom, not the courtroom.”
Newsom further elaborated, stating, “And the minute that Rob said that on CNBC, we amplified that, said this was a better approach. That was the framework, and he worked hard to deliver for California, and I think he did.”
Attorney General Bonta's Position on the Settlement
During a press conference held on Monday, Attorney General Bonta confirmed the settlement. However, he emphasized that this resolution should not be interpreted as an endorsement of the merger itself.
“This settlement is not a vote of support for this merger; it is not a blessing of the broader merger,” Bonta stated.
Bonta further explained his approach: “I am always willing to come to the table for honest, good-faith negotiations, and when we can find a strong solution that protects competition and consumers, I’d rather resolve the case, the issue, in the boardroom instead of the courtroom. That’s what happened here.”
Political Implications and Progressive Backlash
The settlement comes at a politically sensitive time, particularly with midterm elections approaching. An unnamed political observer suggested that Democrats, including Governor Newsom, are keen to avoid a narrative where California is perceived as an unfavorable environment for businesses, especially if it leads to a major media entity like Paramount relocating from Los Angeles to a more business-friendly state such as Tennessee or Texas. This concern, the observer noted, exists regardless of whether the merger might weaken the left-leaning media landscape.
The observer added that “Democrats and their media allies know that the economy is a big issue for voters, and giving the Republicans another anecdote to skewer their disdain for business — even for the lucrative Hollywood market — isn’t politically expedient in the slightest.”
Prior to the settlement being finalized, several progressive and Democratic figures had urged Attorney General Bonta not to agree to terms with Paramount. Among these voices was Senator Elizabeth Warren, a Democrat representing Massachusetts. Following the settlement announcement on Monday, Senator Warren released a statement condemning the outcome.
Senator Warren Condemns the Merger
“Allowing one Trump-aligned, foreign-owned conglomerate to dominate American news and entertainment is a disastrous outcome,” Warren asserted. “After the Trump administration ran an apparently corrupt antitrust review process to wave through a blatantly illegal merger, this settlement greenlights an anti-monopoly disaster that will result in higher prices and fewer jobs, and enables a handful of billionaires to call the shots in the American media.”
Senator Warren continued her criticism, stating, “Corporate executives for aspiring monopolies are always quick to offer unenforceable promises to close a deal, but it is workers and consumers who ultimately pay the price. The new Paramount behemoth is a clear candidate for antitrust scrutiny in a future pro-competition Administration.”
