Media Monday: Ellison’s Exit Strategy & The Lakers Flip

**Jon Kelly** (0:01)
But I'm feeling the vibes of late stage 2008 Do you know the chaos that will be created in the market if you try to block this deal?

**Peter Hamby** (0:14)
Welcome to The Powers That Be Daily, Pucks 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 Monday, August 17th, which means it's Media Monday. Today, Jon Kelly and I break down the high-stakes standoff between Paramount's David Ellison and California Attorney General Rob Bonta, who is leading the antitrust lawsuit against the Paramount-Warner Bros merger.
But now Ellison is threatening to take Paramount out of California, and with it, he's threatening thousands of entertainment industry jobs in the state. Ellison says he's going to do it by October. Is there an off-ramp here for Ellison or Bonta? Jon and I break down all the angles.
We also examine why Bob Iger and Josh Kushner are buying the Los Angeles Lakers for more than $12 billion, and why sports teams are a long-term investment worthy of their billion-dollar price tags. We'll discuss all that and much more on today's episode of The Powers That Be.
Happy Monday, everybody, and welcome to The Powers That Be. If it's Monday, it's Media Monday, and Jon Kelly and I have a very special California edition of Media Monday because there are two very big puck stories going down in California. We're going to talk about the showdown, the Mexican standoff between California Attorney General Rob Bonta, under a lot of pressure from other Democrats and some business interests, to drop his lawsuit against Paramount. Both sides have drawn lines in the sand. It is a fascinating showdown. We're also going to talk about Bob Iger and Josh Kushner of Thrive Capital buying the Los Angeles Lakers for $12.5 billion just a year after the Lakers were sold. There's some interesting backstory there. First, Jon, good to see you buddy. Let's talk about Bellany's scoop on David Ellison, Paramount and California. Ellison, about two weeks ago at this point, according to Bellany, convened his top lieutenants in a meeting and wanted them to know, he was absolutely serious that they would move out of California unless California AG Rob Bonta drops this antitrust lawsuit. He said he would relocate most of the employees, sell the Paramount lot, which is worth like $4 billion, and move to Georgia, Tennessee, or Texas, all states where they make movies and make TV shows. This is such a big deal because Bonta is under pressure from two flanks, and this is one reason he brought this lawsuit. One, you have aggrieved liberals who hate the Ellisons, who hate antitrust, even though it's hard to think of, as we've talked about many, many times, what a future for Warner Bros would look like as a stand-alone company in this attention economy. And yet, they want Bonta to file this lawsuit, liberals, democrats, et cetera, grassroots. We should say the WGA has a separate ongoing lawsuit, but there are also real concerns as to the lawsuit putting pressure on Paramount and being catastrophic for the film and television industry in California. Gavin Newsom has privately talked to Bonta, his own attorney general, about his concerns here and what the economic impact would be if Paramount left. Also, Javier Becerra, the incoming governor of California, nobody's idea of a shock caller, play caller. He's got the same kind of business interests and consultants that Newsom does. He has said publicly he wants there to be a settlement here. I think we're heading toward a place where there will be a settlement. The threat of one of the biggest linchpins of California's film and TV industry, leaving the state is a huge deal. Your boy Spencer Pratt has been posting a lot about this lately, your BFF.
Look, explain the contours of this scoop a little bit, and then I want to know if you agree with me or not that the exit ramp, I mean, I don't see how this lawsuit actually goes through, given all the pressures that are going to be put on Bonta in the coming months because that's the deadline Ellison has set. He's calling Bonta's bluff. They're going to move by October 1st, which is pretty soon.

**Jon Kelly** (4:34)
Well, Peter, before we get into the specifics and the contours, you're a Southern California creative. If I said to you that you needed to move to Texas or Georgia or Tennessee, which is the least bad option in your mind?

**Peter Hamby** (4:51)
Austin, for sure.

**Jon Kelly** (4:52)
Austin, okay.

**Peter Hamby** (4:53)
Great town.

**Jon Kelly** (4:54)
You don't want to live in Nashville? I was predicting I can see you on the stage of the Grand Ole Opry.