California Attorney General Rob Bonta just scuttled planned negotiations with Paramount over that company's plans to buy Warner Bros after CEO David Ellison publicly weighed moving the studio giant out of California.
Quickie background before we get to the scuttlebutt. Heh.
Paramount Skydance beat out rival Netflix in a bidding war over troubled Warner Bros. The Paramount bid includes ownership of Warner's TV properties, which include CNN. That has the Left in Full Panic Mode because Ellison is a Trump ally who already hired Bari Weiss — who leans left but manages much closer to the center — to clear the rot at CBS News.
The merger cleared antitrust concerns with the Trump administration, which probably comes as no surprise. But I think lefties got seriously rattled when even the European Union couldn't rationalize doing anything in its power to hurt Trump and/or Ellison.
That's when Bonta and a motley collection of about a dozen blue-state attorneys general banded together in a lawsuit to stop Ellison's buyout. The merger is now on hold pending a March trial date, despite it being no secret that Ellison could move Paramount (or both companies, after a merger) out of California — and Los Angeles has already lost about 40% of its film and TV production jobs since the 2020 peak.
California Democrat gubernatorial candidate Xavier Becerra is running a largely stealth campaign for governor, keeping mum on his real plans for the state that will elect him anyway. But he's quite clear about what he thinks Bonta should be doing.
It seems like not even two weeks ago [It was not even two weeks ago, Steve —Editor] we discussed how Becerra was urging Bonta to at least talk to Ellison about a compromise agreement. “I hope it settles before court," Becerra said at the time. "It is easier to stand in a conference room and settle than it is to stand in a courtroom."
“I say that having had to stand both in the conference room and in the courtroom," he added. "You get way more done in the conference room than you do in the courtroom.”
So maybe it was at Becerra's urging that Bonta finally agreed to preliminary discussions with Paramount on Friday. Bonta said last week he required "robust" concessions from Ellison to address what he called "anticompetitive" risks.
The Wall Street Journal reported Sunday that "Bonta is expected to ask Paramount to divest some cable channels and commit to keeping its movie studio separate from Warner Bros," before California and the other states would drop the lawsuit.
That story went stale early Monday, when the New York Post and other outlets reported that Bonta called off today's meeting, "after accusing Paramount of leaking and mischaracterizing details from a preliminary meeting between the two sides on Friday."
But here's the kicker. The ticker, actually.
The buyout offer — you know, the one already approved by the DOJ and even the EU — includes "ticking fees" that begin stacking up if the deal doesn't consummate by Sept. 30 of this year. It's all a bit technical, but the fees add up to about $650 million per quarter, or roughly $7 million per day that the deal doesn't go through, beginning on Oct. 1.
The trial is scheduled to take 12 court days, and a final decision could take weeks or even months longer. Presiding over the case is Mexico-born U.S. District Judge Araceli Martínez-Olguín, a Joe Biden appointee. Conservatives typically describe her as an activist judge, and she did spend her earlier career working for left-wing organizations.
Simply stalling with a March court date (Paramount asked for a November trial) punishes Paramount and Ellison by something like $1.5 billion. There's also a $7 billion termination fee if the deal is killed — or should I say "murdered" by Martínez-Olguín? — that Ellison's dad, Oracle founder Larry Ellison, is partly responsible for paying.
So when I read this morning that Bonta again refuses to negotiate with Paramount, I didn't pay much attention to the reason he gave. I just looked at what happens — and what might happen — if the case goes to court.
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