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The settlement requires the post-merger entity to conduct separate negotiations for the licensing of basic cable channels owned by Paramount and Warner Bros. Bonta\u2019s office said the condition, which lasts for five years, would \u201cpreserv[e] the existing competitive dynamic between the companies\u201d and help \u201ckeep prices down for consumers.\u201d This provision does not apply to premium cable channels, streaming services, and broadcast content.<\/p>\n
The free speech and media groups\u2019 filing said this means \u201cthe Combined Entity still would be free to use its power in other offerings\u2014a combined HBO and Showtime (premium cable channels), a combined HBO Max and Paramount Plus (streaming services), and CBS (broadcast)\u2014to extract higher prices in basic cable negotiations, as this form of leveraging is carved out.\u201d The negotiation provision also doesn\u2019t resolve the states\u2019 allegation that combining the companies\u2019 cable portfolios would lead to reduced investment in basic cable channels, the filing said.<\/p>\n
Bonta defended the settlement by saying it will guarantee \u201cmassive investment in domestic film production and provid[e] enforceable guardrails to help keep cable prices competitive.\u201d He said the deal \u201cis not a vote of support for this merger. But we believe this settlement, which resolves our antitrust concerns in every market alleged in our case, protects competition and consumer choice, and puts workers\u2019 needs, concerns, and futures first, is the best course of action.\u201d<\/p>\n
The Writers Guild of America reluctantly settled its own lawsuit against the merger after learning of the agreement with California. The Writers Guild said its settlement prohibits writer layoffs in the CBS News broadcast division for five years and requires $17.5 million in payments to the group\u2019s health fund.<\/p>\n
\u201cWe continue to believe the merger will cause damage to writers and the industry at large,\u201d the Writers Guild said. \u201cNow that the attorneys general have settled with Paramount, however, as a nonprofit, the WGA must contend with the reality of forging ahead alone, with no backing from government enforcers, with a complex antitrust lawsuit that would cost millions of dollars to pursue through trial.\u201d<\/p>\n
A Bloomberg article said the Paramount\/California deal was initially opposed by Massachusetts, New York, Connecticut, and Minnesota. But attorneys general in those states reportedly \u201cconcluded the expense of the legal battle was not justifiable without California at the helm.\u201d<\/p>\n