California Attorney General Rob Bonta said he’d consider structural remedies to resolve a lawsuit over the Paramount-WBD merger but dismissed “behavioral” remedies that are hard to enforce, like David Ellison’s pledge that the combined company will release 30 movies a year.
“There’s ways where the issue could be resolved with potentially structural remedies, he said at a Politico conference in Sacramento called The California Agenda. “Paramount-Warner Brothers are going to have to make business decisions for themselves.”
Asked if there are settlement talks on currently, he said, “I think they’re eager to enter those talks. And we are very happy with where we are. Literally, in every development in this case, we have won and they have lost. … If they, in good faith and sincerely, want to talk about settlement with us, of course we will be open to any proposals.”
Bonta led a group of State Attorneys General in the antitrust suit seeking to block the deal. Set to go to court in March, the case alleges three areas where the $111-billion merger threatens competition – wide releases films, blockbuster films and cable programming. His Politico appearance follows news earlier Tuesday that Ellison plans to start moving Paramount out of California starting Oct. 1 if the AG’s office refuses to start settlement talks by then.
He defined structural remedies as “keeping certain corporate entities separate … in the markets that we have challenged in our complaint. That’s what we’re interested in. We’ve heard a lot about what we call behavioral remedies … A promise to behave in a certain way in the future. A promise to make a certain amount of movies, for example, in a given year. That’s a behavioral remedy. Those are typically not enforceable in the way that we like. Not particularly good at solving the problem.”
Ellison has pledged that the combined company will release 30 films a year. “That is an old stale promise. I’ve heard about that before. It doesn’t really vibe, in my humble opinion, with what the market will dictate and what history has shown,” the AG said.
Bonta also dismissed having Paramount-WBD divest CNN as a remedy, because “the lawsuit is not political.” The Ellison camp has indicated that that it believes the suit is, in fact, political and aimed at keeping CBS News and CNN from coming together under the Ellisons.
“What Mr. Ellison has posited is false. Yesterday, false. Today, false. Tomorrow, false. All day, every day … That is not what this case is about.” He said the suit has “little, if any, mention of CNN.” In an op-ed he published in Deadline Monday, Bonta accused Paramount and Warner Bros of “spearheading a public relations campaign to spin a narrative that is simply false.”
“Of course, I am a person who has chosen a life in public service. I am a proud participant in our American democracy. Of course, I care about the free press and independent press. I believe that we need truth seekers and truth tellers in the press. I believe the press should not be bullied by people in power. I believe that the press should be able to hold the powerful accountable, do investigative journalism, tell stories, and inform the American public so they can make decisions for themselves,” he said. “That is a separate view that I have. That is not related to our bread and butter, meat and potatoes, black and white antitrust case.”
“This is an antitrust merger to do what antitrust law does, which is make sure that prices are fair, make sure that jobs are not cut, wages aren’t reduced, make sure that there’s choice, quality, competition,” he added. “If Paramount and Warner Brothers wants to propose a settlement that involves real, robust structural remedies that address the concerns in the markets that we’ve identified in our complaint, we will listen.”
Bonta declined to comment on a recent report in The Wall Street Journal that California Gov. Gavin Newsom had expressed concerns about the lawsuit and urged the AG to reach a settlement. “I like to keep my private conversations with him private,” he said. “I consider him a friend … I really value my relationship with the Governor. I’m a huge fan. I think he’s incredible. I think he’s an amazing fighter for our democracy, for our state.”
Paramount’s chief legal officer Makan Delrahim will be speaking at the conference later this afternoon.
