Bonta’s Trust Issues

**Dylan Byers** (0:01)
Even if you were to get a combined Paramount-Warner Brothers discovery, you were talking about a business that can barely compete with the likes of Netflix, YouTube, Apple, Amazon, TikTok, Instagram, go down the list. Bonta is asking people to basically suspend their sort of rational understanding of what the market actually looks like and where competition is actually taking place.

**Peter Hamby** (0:23)
Welcome to The Powers That Be Daily, Puck's podcast focused on the intersection of Wall Street, Washington, Silicon Valley, and Hollywood and the players who run it all. I'm Peter Hamby. It's Thursday, July 16th. Today, I'm joined by Dylan Byers to break down the strengths and weaknesses of an antitrust lawsuit brought by Democratic Attorneys General in a bid to stop David Ellison and Paramount Skydance from taking over Warner Brothers' discovery.
Speaking of Paramount, I also asked Dylan an important question. How is 60 Minutes going to make it to air in just two months for their new season, having lost over half of their on-air talent and a bunch of producers? We'll discuss all that and much more on today's episode of The Powers That Be.
Happy Thursday, everybody, and welcome to The Powers That Be. I'm joined today by my colleague, Dylan Byers. We're gonna talk about Paramount today from many angles. California Attorney General Rob Bonta this week, along with several other attorneys general from Democratic states, filed a lawsuit, an antitrust lawsuit, against the planned Paramount, Skydance, Warner Brothers, Discovery merger, saying it will reduce competition and drive up prices for consumers. Dylan and I are gonna talk about whether this lawsuit stands a chance. There's also a request for an injunction to at least pause the merger while the lawsuit proceeds. We're also going to dig in to some 60 Minutes angles, some Barry Weiss angles, of course. Dylan, I must thank you. This podcast recording was scheduled for like right in the final, like 15 minutes of that England-Argentina game yesterday. Impeccable timing on your part. Thank you for moving it back a little bit. Even though we had to see Argentina advance once again.

**Dylan Byers** (2:25)
I know you're devastated. I know you're devastated, Peter.

**Peter Hamby** (2:29)
It's just annoying.
Anyway, Dylan, let's talk about this lawsuit. Now, Rob Bonta, a Democratic Attorney General of California, was under pressure from various factions within his own party.
Rich liberal donors from Hollywood, trade unions, consumer rights advocates, and just Democrats generally who think that David Ellison is a rotten Republican who's going to do the bidding of Donald Trump. And so he really didn't have a choice. He came up with a lawsuit. He's citing the Clayton Act of 1914, which has been used as an antitrust enforcement tool tens of thousands of times since, I believe, it was used to stop the Office Depot staples merger a few years ago. Also Penguin Random House from merging. This merger might look a little different. You wrote in In The Room that this lawsuit probably doesn't stand a chance of moving forward. I sort of agree with that. I think not on the merits, actually. It's just that it's hard to see the federal government eventually consenting to whatever outcome happens here, at least under the Trump administration. What's your take about why this happened and where it's going?

**Dylan Byers** (3:38)
Well, first of all, Peter, I love stories like this because when they fall into puck, there are a lot of bites of the apple from a lot of our colleagues, right? This is a story that crosses not just media and entertainment, of course, but also politics, legal, all manner of angles on this story. A lot has been said over the course of the past 48 to 72 hours about the motivations here. You are right to note the political overtones. I've said it before. I will say it again. You have to imagine that if David Ellison was trying to get this deal done in the Democratic administration, that we'd probably be seeing resistance from AGs on the other side of the aisle as opposed to Bonta.
Look, here's what I think. Thank God we have a colleague like Eric Gardner here at Puck who can walk us through the legal nuances of this. But just very broadly speaking, this is a tough case. I am not saying that Bonta and the other AGs can't significantly delay the merger. I think that they can, particularly if they get a temporary restraining order. But you just look at the market definitions, the space in which they are trying to make their case. It's about theatrical distribution and tent pole films. It's about cable distribution, the cost of a cable subscription.