ParaBros Settlement Fallout

Dylan Byers (0:00)

If you think that Barry Wise or Mark Thompson or any other newsroom leader worth their salt is going to listen to that board, that's by the way going to be handpicked by David Ellison and the board of the combined Paramount Warner Brothers discovery entity, like of course they're not.

Peter Hamby (0:17)

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 Tuesday, September 22nd. Today, I'm joined by Dylan Byers to break down this week's big news, the Warner Brothers Paramount Settlement, announced Monday by California Attorney General Rob Bonta, who is now getting slammed by Democrats for caving and letting David Ellison get most of what he wanted out of the deal. Dylan and I talk about what's in the agreement, how Bonta miscalculated politically, and what the merger means for CNN. We'll discuss all that and much more on today's episode of The Powers That Be.

Happy Tuesday everybody and welcome to The Powers That Be. I'm joined today by who else? Dylan Byers in the wake of the news that the Warner Brothers Paramount merger is all but done after California Attorney General Rob Bonta came out and announced on Monday that they had reached a settlement. They've got till October 1st to cinch this thing up before the ticking fees kick in, but that does seem likely.

Progressives, labor people, antitrust people are all big mad at Bonta for settling. This does look like a good deal for David Ellison. There's certainly political angles here, but there's lots of questions about what these two companies are gonna look like together, where they're gonna cut costs, and what happens to CNN and CBS News who are already under ownership there. With an editorial independence board, Dylan, that's part of the settlement. I can't think of any sort of comparable entity out there in media, so that's gonna be a fascinating piece of this. But let's start with the question. This is basically a done deal, correct?

Dylan Byers (2:14)

Totally, totally a done deal. I don't see anything. This was, as you know, Peter, the last hurdle between David Ellison finally getting this merger through.

Everyone else around the world has approved it. So no, he will get the deal. This will probably close sometime in October. And by the way, we should just note, if it's not already obvious, he got this deal with very minimal concessions, right? When the Attorneys General came in, they wanted structural remedies. And what they got were actually behavioral remedies, which are one, sort of tough to enforce, two, only enforceable for, I believe, five years to the degree that they are enforceable. And just not a big deal, as far as Ellison is concerned, right? Like, he's got to make 30 movies a year, and if he doesn't, he's got to pay 30 million per movie. Fine, like, he can do that. Needs to make a $1.5 billion investment in domestic production. Fine, he can do that. And then, of course, the creation of this editorial board, which is, I wrote for Puck this week, is totally toothless. Like, there's nothing here, and you're right to note that these things, to the extent they exist elsewhere, are meaningless. You might recall that Facebook or Meta has an independent oversight board.

Peter Hamby (3:27)

I did not recall that.

Dylan Byers (3:29)

Of course you didn't, because it's toothless. It hasn't done anything to change how Mark Zuckerberg runs that company. And if you think that, like, there are some five retired journalists out there, you know, there are folks at Redbird, by the way, who are involved with this deal, like a Chris Wallace type, if you think that Barry Weiss or Mark Thompson or any other newsroom leader worth their salt is going to listen to that board, that's by the way, going to be handpicked by David Ellison and the board of the combined Paramount Warner Brothers Discovery Entity. Like, of course, they're not. So you're right to note that even the critics of this merger are mad at Bonta. Bonta looks bad. And by the way, the precedent he has set, recall, there's been so much discussion about our state AGs, the new regulators, since Trump and the federal government won't do it.

If they can't block this deal, I think it sort of tells us about how much power and authority they actually have to block mergers like this.

Peter Hamby (4:26)

Yeah, there's some elements of the anti-trust argument that I thought were pretty strong, but it was always to me going to crash into reality. I mean, I posted this on Twitter last week when news leaked that they were closing in on a settlement, and I said Bonta was always going to cave. He started a fight he couldn't finish. Rob Bonta and some of these other AGs were, by the way, against what Gavin Newsom wanted, and we can get more into what Newsom wanted. I got some reporting on that on Monday. But he was, by the way, like a lot of Democrats in the Trump era who don't have that much power but need to be responsive to activist groups, labor, a lot of people online were saying, do something, someone's got to do something here. The evil overlords are consolidating these companies. It's going to be bad for competition. There is an antitrust argument. Although, if you listen to The Town or Matt Bellamy or this podcast, you also know that there are questions about what would happen to Warner Brothers without this. Some of the very same people criticizing this deal were also criticizing Netflix when they were trying to take over Warner Brothers.