Newsom raises concerns over California antitrust suit blocking Paramount-Warner deal

Governor tells people close to suit blocking deal would hurt state employment

Newsom tells people close to suit blocking deal would hurt state employment

California Governor Gavin Newsom has told people involved in the state’s antitrust lawsuit against the Paramount-Warner Bros. Discovery merger that the deal’s collapse would cause employment to suffer in Hollywood, according to people close to the suit.

Newsom’s office has encouraged Attorney General Rob Bonta’s office, which holds independent authority to file antitrust actions, to find a resolution out of court, the people said. The Wall Street Journal first reported Newsom’s concerns.

The governor’s intervention signals a public split between California’s top two elected Democrats over a transaction that would reshape an industry central to the state’s economy. Bonta’s office filed the lawsuit earlier in July at the head of a 12-state coalition seeking to block the $81 billion deal.

Representatives for Newsom and Bonta declined to comment.

The attorney general’s lawsuit alleges the merger would harm consumers and movie theaters by reducing competition, leading to higher prices, lower quality, and less content for film and television. Los Angeles has been squeezed by Hollywood consolidation and cost cutting in the face of changing moviegoing habits, the rise of streaming, and continued cord-cutting.

It is unclear what impact Newsom’s urging will have on the litigation. The governor has no role in the case and no authority over the state attorney general’s actions. Newsom, who is finishing his second term, is widely expected to mount a 2028 presidential bid.

The Justice Department moved quickly to approve the deal, and many international jurisdictions have done the same. Paramount is pushing for a speedy trial beginning in November, while the attorneys general are requesting an April start date, according to people familiar with the discussions. A judge is expected to decide on trial timing in the coming days.

Under the terms of its agreement with Warner, Paramount must pay $650 million per quarter in ticking fees if the transaction is not completed by September 30.

Newsom’s reported concerns come two weeks after a dozen states filed suit to block the merger, with Bonta’s coalition arguing the combined company would control nearly a third of the U.S. theatrical motion picture market and that four conglomerates would dominate 86% of major film releases.