Antitrust lawyer likens Paramount concessions to a ‘pinkie promise’
Paramount settled an antitrust lawsuit led by California Attorney General Rob Bonta on Monday, ending a coalition challenge from a dozen or more states and clearing the way for its $81 billion merger with Warner Bros. Discovery. Under the settlement, Paramount agreed to keep its headquarters in Los Angeles, release at least 30 movies annually for five years, and invest an additional $300 million per year in domestic film and television production, beyond what it and Warner spent in 2025, Bonta said.
The deal helped stave off fears of devastating losses for Los Angeles’s entertainment economy after Paramount had threatened to move its headquarters out of state if the antitrust suit could not be resolved. At the same time, critics who had hoped to either stop the merger or limit its scope were left wanting. A small group of protesters assailed the state attorney general and Paramount’s chief executive on Tuesday, chanting “Shame on Bonta!” and “Shame on David Ellison!” in front of the iconic Paramount Pictures gate on the edge of Hollywood. The Hollywood Reporter headline asked simply: “That’s All?”
Some critics of the deal said the concessions did not amount to structural changes such as divesting studios or cable channels. Alvaro Bedoya, an antitrust lawyer who served on the Federal Trade Commission during the Biden administration, likened Paramount’s commitments to a “pinkie promise.” “These promises are extremely, exquisitely hard to enforce,” Bedoya said. If Paramount fell short of its spending commitments, attorneys general would need to rely on the company’s own data to prove it, he added. “Even when you have the cleanest case—the cleanest possible case where everyone agrees the bad thing happened—it takes years,” he said.
Asked at a press conference what the baseline would be for Paramount’s additional production spending, Bonta said, “We don’t have an exact number, but the $300 million is a significant increase.” Industry data provider ProdPro estimates Paramount and Warner together spent about $2.49 billion on U.S.-based production last year, suggesting the agreement would bring a roughly 13% increase.
A study commissioned by Paramount from the nonprofit Los Angeles County Economic Development Corp. estimated that California could permanently lose between 29,000 and 58,000 full-time jobs across all industries if the company moved its headquarters and other operations from the state. “When you look at the possibilities that were on the table, I think this is the best one,” said Lee Ohanian, an economics professor at the University of California, Los Angeles.
But there is no guarantee the increased spending or film production will take place in California, which has been losing market share in the industry for decades. Only one of the 19 films scheduled by Paramount and Warner for 2025 was primarily shot in California, according to an economic-impact report commissioned by Los Angeles County and published in June. Last year was weaker than usual for film production, said Andy Young, a film and television editor who has worked in Los Angeles for a decade. “The AGs should have fought for keeping & creating union film jobs in CA,” he said in an email.
The June county report estimated that redundancies from the merger could put 2,495 regional jobs at risk, mainly in corporate functions, technology and real estate. Once merged, the combined company’s balance sheet presents an additional risk, the report said. Paramount agreed to pay Warner shareholders a substantial premium to acquire the company, which it plans to finance with tens of billions in debt, a structure the report said would place pressure on the combined company to deleverage.
Hollywood’s workforce is already smarting, with job losses steepening after dual strikes by actors and writers three years ago. The county’s employment in motion-picture and video production jobs fell 39% to 78,902 between 2022 and last year, marking the lowest level since 2001. Many of these are middle-class jobs held by behind-the-scenes workers such as camera operators, makeup artists and grips, whose work supports truck drivers, costumers and caterers. Eric Kissack, an editor who worked on “The Studio” and “Veep,” said the merger adds more uncertainty to a business that has taken blows over the past decade from the pandemic, streaming, and productions leaving the U.S. “The industry is so constantly in flux that it’s impossible to predict what this will mean,” Kissack said.
Nick Stanton, an animation writer who has produced shows for Disney and Netflix, said he was hopeful the merger’s completion will lead to a burst of activity by Paramount now that the company is more certain about its future. “But I am very wary of corporate mergers like these in general, since they mean less buyers in an already bleak marketplace,” Stanton added. Unions representing Hollywood actors, writers and backstage workers expressed gratitude to Bonta for extracting concessions from Paramount, as well as pessimism over the deal’s implications for their industry. “We continue to believe the merger will cause damage to writers and the industry at large,” the Writers Guild of America said in a statement. Now lacking support from state attorneys general in a complex antitrust case, the WGA dropped a parallel lawsuit to block the Paramount-Warner merger.
California Gov. Gavin Newsom, who helped unofficially mediate the agreement between state lawyers and Paramount, according to The Wall Street Journal, called the agreement a “win for California workers and our creative economy.” Los Angeles Mayor Karen Bass said she did not want to see two of Hollywood’s largest studios become one but added that “now we must focus on holding the companies accountable to these commitments to keep productions on L.A. stages, crews on sets, and ensure paychecks for hardworking Angelenos.” Her opponent in November’s mayoral election, City Councilmember Nithya Raman, said she would work with the attorney general and a writers union to enforce the commitments Paramount made.