California AG Rob Bonta Talks Latest in Paramount's WB Takeover

SPEAKER_1 (0:02)

Bloomberg Audio Studios, Podcasts, Radio, News.

Romaine Bostick (0:07)

One lawsuit that's actually holding up the biggest merger Hollywood has ever seen and the man who filed that case. In fact, California Attorney General Rob Bonta has put his office at the center of some of the country's biggest fights, curbing corporate consolidation, guardrails for social media companies, and a pushback on tariff and immigration policies from the Trump administration.

But these fights increasingly come with economic trade-offs of their own, and perhaps none is more immediate than his effort to stop the largest merger in Hollywood history. Bonta says that he's protecting competition and consumers in his state, while the Justice Department pushes back saying he's a bit out of his lane and should let the federal government take the lead on issues involving national businesses. Here in Studio 2 for an exclusive conversation is the Attorney General of California, Rob Bonta. Great to have you here, Mr. General.

Rob Bonta (0:56)

My pleasure. Thanks for having me.

Romaine Bostick (0:57)

I do want to start off. We have court ordered settlement talks on the Paramount Skydance deal about a month from now. You're still fighting this deal. Do you plan to go into those settlement talks with an eye of actually bringing this to a close, or is this going to come to a close in court?

Rob Bonta (1:15)

We don't know. It could go either way, but we will certainly enter settlement discussions with a plan to achieve our goals, and I hope that we can, and a commitment to engage in good faith and sincerely to try to get what the people of California deserve in settlement talks. So we do prefer when possible to resolve disputes in the boardroom rather than the courtroom, but if not, we'll go to trial, and in this case, we feel very confident going to trial. The judge has already decided and stated that we are likely to win this case when she issued her temporary restraining order.

Romaine Bostick (1:47)

Well, what are the minimum acceptable remedies that you would take in order to settle this case? Is it just the sell-off of some of the cable networks, keeping the film studios structurally together? What do you want?

Rob Bonta (1:59)

Yeah, I've talked in the past about the need for structural remedies. That is what we're seeking, that's what we're fighting for when it comes to the three markets that we have identified in our complaint as the ones that are impacted in an unlawful way by this proposed merger and its blockbuster theatrical release, widespread theatrical release distribution and cable channel licensing. So like in any antitrust case, we look at structural remedies as our top priority.

Romaine Bostick (2:29)

Well, Paramount has offered to have a certain amount of releases that are theatrical. Why was that not enough to appease you?

I think they said 30

Rob Bonta (2:38)

That's a behavioral remedy and we again, that's not structural. Structural is usually keeping different corporate entities separate. A behavioral remedy is a commitment to behave in a certain way, do certain things at a time in the future. Those have typically been difficult to enforce and are not preferred to structural remedies.

Romaine Bostick (2:56)

So sales of cable channels would be structural in you?

Rob Bonta (2:59)

Yeah, divestitures, sell-offs.

Romaine Bostick (3:01)

What about splitting off some of the intellectual property from some of the franchises? Is that something that would be considered structural acceptable to you?

Rob Bonta (3:09)

That could be a component.

Romaine Bostick (3:10)

Do you think that Paramount would even be open to that? I mean, that's a big ask.

Rob Bonta (3:13)

Yeah, I don't know. It's up to them.

There's a whole set of different possibilities. So through the settlement process that's ordered by the court, we'd be able to explore them.

Romaine Bostick (3:23)

Give me a sense of your mindset just on this deal here, because we talk about a DOJ that says it's reviewed millions of documents, says that it's fine with this deal.

Every country out there is more or less signed off in this and says for whatever reason or another, they're okay with this deal. I mean, what are you seeing about this in terms of potential harm that is causing you to maintain this fight?

Rob Bonta (3:43)

Yeah, you know, the other regulators across the world who look at this are looking at it with their own rules and their own geographic market and their own business market. It's very different from ours. We believe that we're the only ones that have looked at this case in the American market, looking at the different business markets that are impacted in an appropriate way. With respect, the United States Department of Justice, I don't think, did an appropriate review. And it was not rigorous. We came to a completely different conclusion when we applied the law and the facts. We clearly found unlawful levels of market concentration that would be, that are permissibly unlawful under the law in three separate markets.