Advocacy Groups Challenge Paramount-WBD Merger Settlement

A coalition of free speech and media advocacy groups is asking a federal judge to reject California's settlement with Paramount Skydance over its $111 billion merger with Warner Bros. Discovery. The groups say the deal gives the public "virtually nothing," according to a filing reported by Ars Technica.

The filing was submitted by the Committee for the First Amendment, Free Press, Freedom of the Press Foundation, Future Film Coalition, and International Documentary Association. US District Judge Araceli Martínez-Olguín must decide whether to approve the settlement.

Why did states sue to block the merger?

Twelve states led by California sued in July to stop the merger, Ars Technica reported. Martínez-Olguín ruled the deal would likely reduce competition substantially and violate antitrust laws, delaying the merger. The states alleged the combined company would "extinguish competition" between Paramount and Warner Bros. Discovery, raising prices, reducing output, lowering quality, and lessening choice, according to the advocacy groups' filing citing the original complaint.

What does the settlement require Paramount to do?

California Attorney General Rob Bonta announced a settlement with Paramount this week, and the other states in the lawsuit signed on, according to Ars Technica. The deal relies on conduct commitments rather than a breakup of assets. One example: Paramount's pledge to release 30 movies a year.

The advocacy coalition's filing noted that Bonta had previously criticized these same conditions. Bonta said such remedies are "typically not enforceable in the way that we like" and "not particularly good at solving the problem," per the filing.

The League of United Latin American Citizens filed a separate objection making a related point: the settlement "requires no divestiture as a condition of closing," and instead "relies on conduct commitments that leave important pleaded harms unaddressed even when the combined company fully complies."

What did the judge say at the hearing?

At a hearing this week in the US District Court for the Northern District of California, Martínez-Olguín told lawyers the settlement is not automatic. "The court isn't a rubber stamp of your agreement," she said, according to Variety's reporting cited by Ars Technica. She said she wants to confirm the deal was "not something that was the result of collusion, but instead was more of an arm's length process."

The judge also asked the parties to respond to a letter from Sen. Cory Booker (D-N.J.), who argued the companies should explain "how each provision remedies each harm alleged in the complaint."

By the numbers

• $111 billion — value of the Paramount Skydance-Warner Bros. Discovery merger
• 12 — states that sued in July to block the deal
• 30 — movies per year Paramount has pledged to release under the settlement

What to watch

• Whether Martínez-Olguín approves, modifies, or rejects the settlement
• The parties' court-ordered response to Sen. Booker's letter on harm-by-harm remedies
• Whether LULAC or the advocacy coalition are granted standing to formally intervene
• Any additional briefing on how the settlement was negotiated between California and Paramount

For the full account of the filings and hearing, see Ars Technica's report.