LISTEN NOW:
California Attorney General Rob Bonta and 11 other Democratic attorneys general just settled their lawsuit blocking Paramount Skydance’s $111 billion acquisition of Warner Bros. Discovery. The merger is now set to create one of the world’s largest media companies and put CNN and CBS News under the control of David Ellison, son of billionaire and Trump ally Larry Ellison. Bonta says the settlement is a victory — but what’s really in the deal’s fine print?
Today on Lever Time , Natalie Bettendorf sits down with former FTC Commissioner Alvaro Bedoya and antitrust legal expert Lee Hepner to explore what’s hiding in the merger settlement, why California Gov. Gavin Newsom “chickened out” on the matter, and what it all means for the future of our news and entertainment.
🎧 SUBSCRIBE FOR FREE on the podcast player of your choice:
Apple Podcasts • Spotify • YouTube • All Others
Are you a paid subscriber? Click here to access your ad-free premium feed .
You can read more Lever reporting on the Paramount Skydance merger here .
SPONSORED
Political campaigns buy personal data from brokers to build precision profiles on voters. That same data gets picked up by scammers running fake donation and voter-registration schemes. Your information doesn't disappear after election day — it gets resold and repurposed indefinitely. Incogni removes your data from these brokers, so you stop being a profile for sale. Get 55% off with code LEVER .
Try it out.
---
This episode was produced by Natalie Bettendorf . Video and audio were mixed by Ron S. Doyle . Our theme music is by Nick Byron Campbell . Marketing support, ad sales, and hosting from the Podglomerate .
---
TRANSCRIPT
Following is an automated, unedited transcription of this episode. The text may contain grammatical or spelling errors, especially for proper nouns, or attribute text to the wrong speaker. If you plan to quote any part of this transcript, please first confirm that it is correct by listening to the audio.
[00:00:00] Natalie Bettendorf: From The Lever's reader-supported newsroom, it's Lever Time. I'm Natalie Bettendorf.
[00:00:04] Rob Bonta: We are here in Los Angeles, the beating heart of America's film and TV industry, and I'm here to announce a settlement.
[00:00:11] Natalie Bettendorf: This week, Paramount Skydance reached a settlement deal with 12 states that filed an antitrust lawsuit against Paramount's proposed $111 billion acquisition of Warner Brothers Discovery.
With the case now settled, the entertainment giant can move forward with its merger, which will create one of the largest media companies in the world.
[00:00:32] Rob Bonta: I want to be clear about something right up front. This settlement is not a vote of support for this merger.
[00:00:42] Natalie Bettendorf: That's California attorney General Rob Bonta speaking at a press conference earlier this week.
[00:00:47] Rob Bonta: But as I've said before, and I'll say again, I'm 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, and that's what happened here.
[00:01:10] Natalie Bettendorf: Last month, Bonta said that any deal would require, quote, "robust structural remedies." In antitrust cases, that usually means forcing a company to divest certain assets or make big changes to its ownership structure in an effort to mitigate potential damages of allowing a monopoly to form. But instead of typical structural remedies like breaking up segments of the company, Fanta's settlement with paramount only includes behavioral remedies.
Legal experts say that these orders are typically weaker, and there's a long history of companies flagrantly violating their terms, all with minimal repercussions. Rob Bonta and California Governor Gavin Newsom are touting the settlement as a win. But is that really true? Does this settlement actually protect jobs? And what does it mean for everyday consumers?
Today on Lever Time, I'm sitting down with alvaro Bedoya and Lee Hepner of the American Economic Liberties project. Alvaro is a senior advisor and the former commissioner of the Federal Trade Commission, and Lee's an antitrust lawyer who spent the last decade working in and out of government on policies that tackle corporate power at every level.
Today, we're gonna find out what is actually in the fine print of this settlement, and is it really the victory that Democrats are claiming? That's all coming up on today's episode.
[00:02:42] Natalie Bettendorf: Welcome back to Lever Time. I'm speaking with Alvaro Bedoya and Lee Hepner of the American Economic Liberties Project.
So first I wanna kick this off, Lee, and do a quick refresher. Could you tell us a little bit about the original lawsuit? Who filed it, and what exactly were they arguing for?
[00:03:00] Lee Hepner: Yeah. So there were actually two lawsuits at issue here. One was filed by a combination of state attorneys generals 12 of them in total, led by, California, , Attorney General Rob Bonta. New York Attorney General Tish James was also very in the mix. But several other attorneys, New Jersey, Attorney General, Connecticut Attorney General, uh, many that I'm, I'm not gonna be able to name here.
A, a separate lawsuit, filed by the Writers Guild, of America. That labor union, uh, which has been, advocating long before this merger for, attention to, uh, competitive dynamics in, uh, the film and television industry. So there were two lawsuits there.
Both of them named, three distinct markets, largely focusing on, the production of, , major blockbuster tent-pole films. They were also concerned, with, uh, cable TV channels and, the combination of, broadcast channels, that would result from this merger.
And, they very, you know, patently saw it as, as is usual in a Clayton Act case, a anti-merger case, that the merger be blocked, um, and that this merger not occur at all. And that's kind of what the lawsuits were about. W- I'm sure we'll talk a lot more about what people expected to happen.
[00:04:04] Natalie Bettendorf: And Alvaro, I wanna pivot to you and ask you a little bit more about the settlement, right? So Paramount settled. This was kind of coming into the works later last week. There was this wave of the rest of the, attorney generals kind of conceding and, hopping on Rob Bonta's train.
Can you tell me a little bit about how that unfolded and what exactly is in this settlement?
[00:04:29] Alvaro Bedoya: So it's a little hard to know how it unfolded. There is some reporting that's starting to come out, but obviously, you know, I wasn't in that room. But I can talk about what's in this thing and also the contrast between what's in it and how, uh, Attorney General Bonta was talking about what he wanted to see in a settlement, because something very unusual happened.
So usually when you're litigating an antitrust case, in general, you don't talk about it too much. To the degree you talk about it, you talk about how you think you're right, how you think you're gonna win. But you don't really start getting into the red lines around settlement. And what was unusual and at the time I thought good about what Attorney General Bonta was saying publicly before the settlement was, he was basically saying to Paramount, "Hey guys, come talk to me when you wanna sell stuff off.
He spoke repeatedly on national television, on podcasts, what have you, saying, "I'm not interested in pinky promises about behavior. I'm not interested in one-off this or that. I want you to sell the parts of your companies that would otherwise be in competition but for this merger." And so That seemed to me be his red line.
And yet, we come out of it with a settlement that has not, you know, 80% structural remedies, 20% behavioral, 50% structural divestments, 50% behavioral. There are zero divestments. Zero things are being sold off from this company, and yet Attorney General Rob Bonta is out there saying that it's a good deal for California.
And so, what's in the settlement?
So there's 1.5 billion more in added domestic investment. There is a 30 films released a year commitment, and if they don't live up to that commitment, they are, promising to pay $30 million into kind of a special fund. And hey, if you're worried about CNN and CBS News being owned by these super close allies of the president, we got you 'cause we have this editorial independence board.
Oh, and hey, added bonus, Paramount's not leaving California as we were beating the drum that we did. And the sad fact is every piece of that isn't quite there, and in fact, some of that is literally the opposite of what it seems. So let's take the editorial independence board, right? You would think that the an- editorial independence board would be independent of the Ellisons, but in fact, the people on that board are handpicked by the Ellisons, and they report to, wait for it the Ellisons. Okay? So there's no independence in the editorial independence board. This whole thing about we are releasing 30 films, we're releasing 30 films.
And here's the other thing that's happened. They have not committed to make 30 films a year. That would be producing or jointly producing maybe 30 films a year.
No. They have committed, if you look at the fine print of this thing, to produce 15 films a year. They've committed to produce half of that. And y- you might say, "Well, that, that still sounds kinda good, right?" No, because last year they produced 18 films. So they could change their mind in a year or two and just start putting out 15 or 16 films a year and then distributing the rest and, and they would be fine under the terms of this settlement.
Then you might say, "But Alvaro, you know, isn't this a big win because they're gonna stay in California? They're not gonna move their headquarters in California." But if you read page 10, section C, subpart 1 of this, all this promises to do is not close or sell those lots, and in fact, they're actively talking about leasing them as long as they lease them for film and television, right?
Nothing on this page committed him to do that. All right. What about this $300 million a year in added domestic production?
And look I spent June meeting in person with film and TV workers in and around LA, in and around New York, in and around Atlanta. And look, you know, if you have $300 million a year for a billionaire company like this is not that much money. But look, if it's actually going to people, you know, out there, then maybe that's a good thing.
But when you pair that up with the releases, right, it starts really getting sketchy. every release they're short of either the 15 produced or 15 distributed mark, they're gonna pay $30 million into this fund. Any time you fail to meet that that 30 film mark, $30 million gets paid into not one fund, but five or six funds. First of all, the four or five unions and guilds that do this work will receive payments, and I don't necessarily have a problem with that.
It's gonna go to their health and retirement funds. Okay. Who else is gonna get paid? The National Association of Attorney Generals fund. The Motion Picture Fund. And so these checks aren't going to the people who won't get those jobs because these films aren't made. They're gonna go to five or six different funds, and they will go years later after there's a six-month period of curing it.
Now Layered on top of all of this is a force majeure clause, uh, which says that if there is a strike, if there is a labor disruption, this is Hollywood, this is the entertainment and film industry. It's one of the few parts of our country with sectoral bargaining, right? Where whole guilds can negotiate with whole portions of the industry.
Of course they're gonna strike. Of course there's gonna be labor disruptions. This agreement is null and void. Separately, if there is a, wait for it, economic recession, this agreement is null and void. This thing is bad and it's too bad that people were led to believe otherwise.
[00:10:28] Natalie Bettendorf: I think one of the things that, people are hearing, and, you know, the public is hearing, is what California Attorney General Rob Bonta and Governor Gavin Newsom are kind of framing this deal as, right? Which is saving California jobs, one of the threats that David Ellison was making was that he was gonna move Paramount to out of the state of California to Tennessee,
and I think we can talk about this a little more and get into the politics of that threat, right? But I think I wanna stick to the legal threat of it and just what this meant for getting to this deal, which, Lee, is this true, was this really a threat of Paramount leaving the state, or do you think it's this situation where Rob Bonta realized he couldn't win the case, and now they're trying to save face by framing it as a win?
Like, I'm curious what you make of that?
[00:11:20] Lee Hepner: Well, well, let me just pause for a moment and, say that I agree with everything that Alvaro just said about this settlement. Just to underscore the point, there are no structural remedies in here whatsoever. There are conditional divestitures if they fall short of their commitments, but only of certain properties, the importance of which to the overall, combined entity seems rather small.
This entity owns a forty-nine percent share in Miramax, and that, would be a conditional divestiture. Unclear whether that is actually important to Paramount and WB and certainly does not resolve other concerns. And then the other overlaying piece that Alvaro didn't mention, but I know he knows is, that these conditional remedies, the behavioral remedies in here, last for five years only.
That is a blink of an eye in, in the context of how we perceive the arc of antitrust and developments in society. Look time between filing the Google search antitrust case and a remedy in that case was five years. So we know how quickly that goes by. You know, the five-year, term on conditional remedies, that is a countdown to a cliff.
just don't understand how, even if you, wanna make the case that these are meaningful or enforceable remedies, how that is, you know, anything but cold comfort to an industry that is now staring down the reality of unfettered, market power in five years. As to this notion that they would leave California, that, it was such a strategic threat for them to make.
It's not unlike the capital strikes that we see in so many other situations. And you would hope by now that these, regulators, these are the most, skilled, and accomplished and familiar, been-on-the-block people in our politics, would know how to respond and interrogate the reality of that risk.
You know, when every time you seek to regulate Uber and Lyft, for instance, those companies say, "Well, we're just gonna pull our service out of your state." And that, that tends not to be true, particularly when California is such a massive economy. It's hard for corporations to leave, California. But I think that there was an inadequate effort to interrogate the veracity of that threat, plain and simple.
And to the extent that, , maybe some of that discussion, took place behind closed doors, that should've been aired out in public. I think it would've been good politics, actually, , for them, for Attorney General Bonta, uh, Governor Newsom, LA Mayor Karen Bass, to explain why they thought that threat was serious.
Instead, it looked rather like Paramount was playing a public, media manipulation game, and it was a very strategic one. But it seemed to be the thing, absent other variables that I'm not aware of, that, that really changed, the conversation and, and sort of forced the settlement. And I'm not sure it was ever even true.
You have, David Ellison in the press just today, yesterday saying that, uh, "We are happy to make California our home. We are not leaving." Furthermore, if it was in their financial best interest or for tax reasons to leave California, they would do so even if the merger was allowed to proceed.
That's the reality that we're actually talking about here. So I think it's a thin commitment to stay in California. I think it was a thin threat to up and leave California. And I don't see much in this settlement that really prevents them from doing that either in five years or sooner.
[00:14:21] Natalie Bettendorf: We're gonna take a quick break. When we return, more about the risks of this merger and how it will affect American entertainment. We'll be right back.
[00:14:33] Natalie Bettendorf: Welcome back to Lever Time
alvaro, I wanna ask you this question because it's been heavy on my mind as I've been reading about the merger, and all of this news, and I think a lot of people are thinking, "Why did Rob Bonta settle?" He didn't have to. He could have held out for a better deal.
But why did he do it for such a disappointing deal, , from the consumer's perspective, from an anti-monopoly perspective? What's your take on that?
[00:15:00] Alvaro Bedoya: I mean, that's my question, Natalie. I, I don't know. I don't know why he settled it. It doesn't make sense to me. one thing that kept on coming up in his press conference is California jobs. Other than keeping the Paramount and Warner Brothers lots open and not selling them, even though they can lease them to other people, to third parties, there is nothing in this that guarantees California anything, right?
There's this $1.5 billion commitment to more domestic production, but if you look at where that production was homed, just last year, the two companies according to a study commissioned by the LA Economic Development Board, produced one film in California. That was the, uh, the Leonardo DiCaprio vehicle.
What was it called?
[00:15:46] Natalie Bettendorf: Oh, one battle. yeah. One Battle.
[00:15:48] Lee Hepner: Great movie
[00:15:49] Alvaro Bedoya: was, that was filmed in Eureka, California. Great movie. Well, I, I was, I thought it was kinda mid. I, I thought "Sinners" was robbed. But look, they could do all this filming in New Jersey.
Th-they Could do all this filming in Kentucky or Louisiana or Texas, you know, some of which are places with uncapped film credits. And so there is no requirement that these new jobs live in California. So your question is my question, and I also don't understand the speed with which the song changed so quickly.
But look, I recognize I'm being really critical of Rob Bonta and he was the messenger, so to speak, of this, and ultimately he was the decider to put this in George W. Bush terms. But the impetus for this was Gavin Newsom. The impetus for this was Xavier Becerra, uh, and to a degree, Mayor Bass.
And when you have the governor of your state and the person who is likely the incoming governor of your state, who has no small impact on your budget, how you can do your work, saying, "You better settle this thing," that is an extraordinary pressure to put on, yes, a separately elected officer, but one who exists within the California government.
And so I think people need to remember come 2028, when everyone's gonna be really economic populist and everyone's gonna say, "Oh, I'm gonna stick it to the man," that when Mr. Newsom had a chance to actually fight for his state, against these oligarchs, he chickened out. He chickened out. He looked at this thing in the face and said, "Nope.
I'm gonna go home. I'm not up for this fight, and I'm gonna tell everyone around me to do the same." That is what everyone needs to remember here
[00:17:36] Lee Hepner: you know, I'll say something, potentially forgiving for Attorney General Bonta, and that's, you know, maybe, he took a look at his case and thought the merits weren't there. Maybe he didn't think that it was a winning case. Maybe that behind-the-scenes analysis occurred. But that doesn't explain why for months he adopted such strikingly different rhetoric publicly.
Alvaro and I are both familiar with, antitrust law and take a look at cases closely. You know, this was a presumptively illegal merger. The, the weaknesses in the case were not obvious to me but to the extent that that analysis occurred, you know, find a different way to talk about it publicly other than, putting forward these demands that are setting this goalpost, that are gonna dictate how a coalition is engaging with this publicly.
I mean, it was, it, it was a striking pivot, even if that was the case. So I, I share Alvaro's kinda confusion as to the why here.
[00:18:25] Natalie Bettendorf: Lee, I'd love to hear more from you too, just from an antitrust perspective. You know, the things that as you were watching this deal kind of come together and, you know, what we heard publicly and, and when- once the settlement came about, what to you are the things you're worried about, and what are the risks of letting this merger go through?
And now that there's been big clearance, like, what are you worried about?
[00:18:47] Lee Hepner: Well, I mean, l-let's just start with the history of mergers between Hollywood studios. This is not the first merger in this space, in this industry. I actually think that the, very united, block the merger coalition was, was buoyed by their experience of of mergers historically.
When you see Disney and Fox merge, you see a, fifty percent drop in the number of movies that they're making then the very next year. So I, I think that we have, serious concerns about the number of films that are being made. And as, Alvaro mentioned, their commitment going forward is A, half of what, people h- are, , saying, are interpreting this order as, and B, no more than what they have historically made, and only lasts for five years, and is, you know, accompanied with this clause that they can just pay their way out of that obligation to make these movies.
So I think, you know, we have serious concerns about that. There are certain concerns about, the diversity of voices, particularly from our independent film landscape, , where there are fewer buyers of scripts. There are, fewer movies getting greenlit theoretically and fewer opportunities for above the line and below the line workers in particular, many of whom Alvaro encountered on a, , sort of town hall tour, um, who aren't gonna have work.
, I think that the lack of the diversity of voices, the, the constrained access to film archives for documentary workers, those are serious concerns as well. I think anytime you put, the decisions around what content gets made, what voices get heard in a smaller number of hands, you're going to diminish the diversity of content that gets produced.
, And some of that kind of marginal riskier content is what really drives innovation in this marketplace and actually pushes our culture forward more broadly. When Disney and Fox cut back their film production by fifty percent, you know, what they cut was actually adult-oriented, independent filmmaking, relying much more heavily on franchise, IP, films.
And so, you know, you see the, the diminishment of, you know, outside voices, of diverse voices, actually being, put into that bloodstream. Now, there is something in this settlement, I should say, for independent filmmakers. There's a, I think it's five million dollars a year dedicated to indie films.
As I just saw, you know, Matt Belloni, opining, in his column, actually, Sinners, which Alvaro mentioned, that qualifies as an indie film under the definition here. Tenet qualifies as an indie film. So, you know, I, again, it seems like some of the commitments here are very illusory, a- and not really providing a whole lot of, security or comfort to this industry.
And there are many more markets at issue. I mean, certainly, you know, the, the TV, CNN and CBS, , the diversity of news making is,\ a, a major concern. But yeah, I don't know what to say beyond that there's very, little comfort in this settlement.
[00:21:26] Natalie Bettendorf: We're gonna take one more quick break.
Before we continue, I just wanna tell you about The Lever's weekly newsletter, Midterm madness. Election season is approaching fast. That's why our newsroom is working hard to bring you the elections worth watching, the money trails worth following, the numbers that cut through the spin, and the campaign moments that reveal more than the official talking points ever will. Subscribe to Midterm Madness now at levernews.com/midtermmadness.
We'll be right back.
[00:22:01] Natalie Bettendorf: Welcome back to Lever Time.
[00:22:03] Alvaro Bedoya: We are in a interesting time in our country where we've been living in a gilded age for a little while, but suddenly everyone has woken up to it. In 2026, when, you know, CBS, CNN, TikTok, HBO, which includes, like, "Last Week Tonight," are all owned by one family, and with the exception of TikTok, are owned in part by the Saudi Arabian royal family through their sovereign wealth fund, by the Qataris and Abu Dhabi sovereign wealth funds. This is a radicalizing moment, and what's cool about the film and television industry is that it's one of the few industries in this country where you actually have a model of what a level playing field could look like.
You used to have these things called FinCEN Rules. You used to have something called the Paramount Decrees, that generally said, "Look, the people who make content cannot own the distribution of that content, whether it's the broadcast channels on television or whether it is, the movie theaters."
You had another set of restrictions on how many broadcast affiliates a particular media conglomerate could own, so they can't literally own every news station or one out of every two news stations in the country. We had limits on these things. We had things that kept the playing field level and, and opened opportunities for independent voices, right?
And, and for everyone listening, and I think The Lever's gonna have more folks like this than almost anyone else. The question is not how we tighten the existing laws, how we improve upon the Sherman and the Clayton Act. You know, the question is, how do we pass the next Clayton Act, the next Sherman Act for this moment?
How do we break up big media? How do we break up big meatpacking? How do we reverse all these corrupt mergers? And the good news is that two of those three missions actually have legislation pending in the United States Senate to actually achieve them. My hope is that this is a radicalizing moment for what concentration in the media does to our country and there are real paths based on history and based on legislation that's out there today for how to go about breaking these guys up and leveling the playing field.
[00:24:18] Natalie Bettendorf: Definitely. And Lee, just as a final question, I think just more of a kind of looking ahead we're expecting this deal to close very soon, know, now that this case is settled, are there gonna be other lawsuits coming down the pike? And how soon do you think we could see this specific deal close?
[00:24:36] Lee Hepner: I'm just looking at the same reporting as everybody else and seeing that, you know, they're planning to, to close the deal in early October. There, there is certainly a further kind of integration process, um, that may take a little bit longer than that. I share Alvaro's hope that maybe they are chastened, to prevent integrations that are gonna result in mass layoffs more immediately.
I think that there is hopefully an opportunity, we'll see in the months, ahead, for you know, local lawmakers, but perhaps also state, and federal lawmakers distant as those possibilities may seem to step in and, and actually help protect some of the workers who are predictably going to lose their jobs here.
But I think the timeline forward is that early, October. And I do wanna just agree. I mean, Alvaro's point, you know, th-it's so easy to catastrophize here, and by every measure, I certainly have catastrophized. But if it's not paired with the ability to look forward at the opportunities, to channel, the widespread unified outrage at this merger into some other form of action, whether that's legislative or enforceable action, at any level of government.
You know, I know that Alvaro and myself, are both actively engaged in those conversations across industries and will continue to remain so. But that forward-looking lens has to be it, and it's not just copying what we did before. We can learn from what we did before and figure out how it grafts onto a fair, society today.
[00:25:55] Natalie Bettendorf: Alvaro Bedoya and Lee Hepner, thank you both so much for joining us today and explaining all of this. We'll definitely need your expertise more in the future. Thank you
[00:26:05] Alvaro Bedoya: Thanks for having us.
[00:26:06] Lee Hepner: Thank you.
[00:26:07] Natalie Bettendorf: Thanks for listening to another episode of Lever Time.
Lever Time is a production of The Lever. This episode was produced by me, Natalie Bettendorf. Our theme music is by Nick Byron Campbell, marketing support from the Podglomerate. Our director of podcast production is Ron doyle.
You can subscribe to Lever Time on Apple Podcasts, Spotify, iHeartRadio, or wherever you get your podcasts. And while you're at it, leave us a comment or a review. We really appreciate hearing from our listeners, and it helps us spread the word about the show.
Remember, for ad-free episodes, exclusive bonus content, and access to The Lever's entire archive of investigative journalism, please consider becoming a premium subscriber. Head over to levernews.com to learn more about becoming a premium subscriber or click the link in this episode's show notes. I'm Natalie Bettendorf.
We'll be back next week with another episode of Lever Time.
What’s Hiding In The Paramount Merger Settlement
Aggregated summary from an independent source. Read the original at LeverNews.