Democrats just signed off on a massive consolidation of Hollywood power, striking a settlement deal in a 12-state antitrust lawsuit that will now allow Paramount Skydance’s attempted $111 billion takeover of Warner Bros. Discovery to move forward.
California Gov. Gavin Newsom, a prospective Democratic presidential candidate, joined other party bigwigs in hailing the news of the deal. The agreement, he said Monday, will “protect California jobs while putting a safeguard in place to help preserve editorial independence for two of America’s most important news organizations.”
But is the deal really such a win? The settlement ’s fine print suggests otherwise.
🎧 Tune in to Lever Time later this week for an in-depth investigation into why Democrats caved on the Paramount merger — and what it means for you.
Subscribe To Lever Time
No Structural Remedies
Paramount, which owns CBS News, is seeking to acquire Warner Bros. for $111 billion in a deal that includes funding from Trump benefactor Larry Ellison and Middle East monarchs . The merger would give Paramount control of CNN, owned by Warner Bros — a major consolidation of two news and entertainment rivals that will create a media behemoth of unprecedented size.
After President Donald Trump’s antitrust authorities cleared the merger in June , the deal was stalled by a landmark lawsuit brought weeks later by a group of Democratic state attorneys general. The suit became the last line of defense against the largest media-entertainment merger in recent years.
In August, California attorney general Rob Bonta, who was spearheading the lawsuit, said that any deal would require “robust structural remedies.” In an antitrust case, that usually means forcing a company to divest certain assets or make significant changes to its ownership structure to limit the competitive harms of a merger.
Despite his past statements, Bonta’s settlement with Paramount only includes behavioral remedies . Legal experts say these consent orders governing certain company practices are generally considered weaker, and companies have flagrantly violated them in the past with minimal repercussions.
In this case, the consent order requires Paramount to maintain a certain level of investment in film production, release 30 films a year, and ensure the editorial independence of its new media properties, CBS and CNN, among other minor concessions.
To make sure Paramount holds up its end of the bargain, California will have to constantly monitor and police the company’s behavior. The only quasi-structural remedy in the settlement is that if Paramount doesn’t meet its requirement to increase film production, then the company would theoretically be forced to divest from Miramax Studios.
“They mismanaged the stakes of this grotesquely, and I think that’s because these people are weak and didn’t want to fight,” said Lee Hepner, senior legal counsel at the American Economic Liberties Project.
Under the settlement, Paramount won’t have to sell any of its cable television channels and is required to spend, on average, just $5 million a year supporting independent films.
“Could they try to be more condescending with this settlement?” asked antitrust expert Matt Stoller.
Even the modest concessions in the settlement are set to sunset within five years, after which the behavioral remedies won’t apply.
“This is a countdown to a cliff,” said Hepner.
Battle Of The Hollywood Censors
While politicians, military brass, and Chinese officials jockey to control the content of Hollywood blockbusters, experts say no one is looking out for the filmmakers themselves.
The Lever Freddy Brewster
An Editorial Independent Board That’s Not Independent
After Bonta conceded on a settlement, four states — New York, Connecticut, Massachusetts, and Minnesota — reportedly held out for a better deal. According to Bloomberg , one final win the holdouts managed to secure was an editorial oversight board for CNN and CBS, both of which will now be brought under the control of Paramount CEO and Trump ally David Ellison.
The states had reason to be concerned: Under Ellison, who acquired CBS via the 2025 Paramount-Skydance merger, the news organization’s independence has been called into question . Under the leadership of conservative journalist Bari Weiss, brought in by Ellison to helm the organization, CBS has instituted multiple rounds of layoffs and shuttered CBS Radio, all while facing allegations of editorial interference and political retaliation.
But the so-called “editorial independence board” outlined in this week’s deal is not likely to meaningfully safeguard journalistic integrity at the news outlets, some experts warn.
The board — made up of five journalists — will be hand-picked by Paramount’s board of directors, which is led by Ellison and stacked with his allies, including his close confidant, private equity investor Gerry Cardinale .
While the new board’s mandate includes “establishing and monitoring adherence to ethical journalism” as well as ensuring “editorial independence” from the new company’s ownership, it will answer directly to Paramount’s board of directors, a structure that calls into question how exactly the editorial independence board could enforce its mandate.
Antitrust economist Hal Singer said the board’s design rendered it toothless.
Companies under such scrutiny, he said, “love to create the appearance of self-regulation when they’re holding all the cards.”
SPONSORED
Internet data companies have a page where you can delete your information. They deliberately hide it from you.
Reporters found dozens of data brokers, who sell your personal information, had hidden their opt-out pages from search results. Congress investigated. Four broker breaches alone had already cost Americans $20 billion in identity theft — and the industry's response was to make removal harder.
Incogni sends legally binding removal requests on your behalf, monitors for new exposure, and repeats removals automatically. Get 55% off with code LEVER .
Get 55% off with code LEVER
Jobs Aren’t Protected
Bonta reportedly faced mounting pressure from Newsom, California gubernatorial candidate Xavier Becerra , and Los Angeles Mayor Karen Bass to settle the case. Those calls apparently became more urgent once Paramount threatened to move its headquarters out of California, potentially leading to job losses.
But some suspected Paramount would never actually follow through. Threats of state-hopping are a common tactic weaponized by corporations facing new regulations or legal actions.
Paramount also ramped up pressure by filing an unusual court order asking the state of California to post a $1.8 billion bond to cover any financial losses incurred by Paramount if the company won the merger case. While a judge hadn’t yet ruled on the bond case and experts question the legality of such a requirement, the Trump Justice Department filed a brief in the case supporting Paramount.
“California really fell to this idea that they were going to lose their political leverage,” explained Hepner. “Bonta said… that he’d rather resolve these matters in the boardroom than in the courtroom. Well, that’s antithetical to how we think about the rule of law and enforcement generally… if you lose the case, at least you fought.”
Now, by refusing to fight the matter in the courtroom, opponents of the Paramount merger say the deal could lead to job losses anyway. Independent research shows that if the merger goes through, it would cause the loss of roughly 4,500 jobs in Los Angeles County over the next three years, or $1.26 billion in lost wages.
“I would expect job cuts soon,” said Singer. “That’s the first thing they do is they always ax the jobs, and then I would expect downward pressure on wages.”
Those job losses, which are common for megamergers, could be exacerbated by the terms of the settlement.
According to former Federal Trade Commission commissioner Alvaro Bedoya, some of the modest concessions in the settlement’s language are more muddled than initially presented. For instance, Paramount’s commitment to produce 30 films could be illusory.
“The settlement makes clear they’re not committing to make 30 films a year. They’re committing to make (i.e. produce or jointly produce) 15 to 16 films a year, and to distribute the rest,” Bedoya wrote on X.
Lots Of Escape Hatches
The settlement is riddled with various loopholes and other legal deficiencies that could undermine enforcement, according to antitrust lawyers.
One provision that stands out is the force majeure clause , stipulating the unforeseen circumstances under which the settlement won’t apply. These clauses are sometimes included in settlements as a formality for extreme events like earthquakes, natural disasters, pandemics, or terrorism.
However, Paramount’s deal includes an unusually wide-ranging set of scenarios covering “strikes, labor disruptions, [and] economic recessions.”
Labor disputes are one of the more problematic criteria slipped into force majeure clauses because such events are often within the company’s control and can be negotiated with the workforce or union representatives.
Major Hollywood studios just underwent an extended months-long labor strike in 2023. A related incident could theoretically be used by Paramount to undo its commitments, although some strengthened union protections in the settlement could complicate such corporate efforts.
“This settlement is also a union-buster,” said Hollywood actress and labor leader Jane Fonda in a statement blasting the settlement and specifically citing the force majeure clause.
The settlement also lets the conglomerate off the hook if there is a recession. Some analysts have warned that one may be imminent, given the looming fears of an “ AI bubble ” as AI companies fail to generate enough revenue to justify their massive valuations.“Yes, if there’s a recession, which is likely if the AI bubble pops, all of these promises are no longer enforceable,” noted Stoller.
The Fine Print In Democrats’ Hollywood Merger Surrender
Aggregated summary from an independent source. Read the original at LeverNews.