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Twelve states settle the $111bn Paramount case for a CNN board and 30 releases a year
The twelve attorneys general leave with two promises they will have to police themselves, and Free Press says parts of the deal ask less of Paramount than the two companies already do separately.
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What happened
- California attorney general Rob Bonta has settled the 12-state antitrust suit against Paramount, ending it after what Techdirt described as a relentless, bipartisan pressure campaign to settle.
- The states sued last July over the $111 billion deal, arguing it was largely anti-competitive and would bring mass layoffs as labor and consumers paid down the deal's debt load.
- Bloomberg's account of the terms describes a board of some kind meant to keep CNN from going the same direction CBS went under Bari Weiss.
- The settlement also holds Paramount to its promise to deliver 30 traditional big studio releases per year.
- Techdirt reported that Paramount walks away from the case without selling an asset or promising anything on labor.
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Why it matters
- contradiction Free Press says Bonta had held to a standard of structural remedies only, and the case now falls short of a benchmark its own prosecutor set.
- constraint Until the text is filed, outsiders are guessing at whether the release pledge has a definition, a penalty or an end date, and at what the states actually won.
- precedent Threatening to move a studio out of the state preceded a settlement here, and the next target of a state antitrust suit has that sequence available to cite.
- cost Labor terms never went into the deal, so if the layoffs the states forecast arrive, the people laid off have nothing in the settlement to point at.
Someone in a state attorney general's office is going to spend part of next year deciding whether a particular title counts as a traditional big studio release. If Paramount hits its number, that call comes up about every 12 days [16]. The final settlement language has not been made public [3], so the definition that decides each call cannot be read by anyone outside the negotiation.
The board is the harder commitment to operate. Techdirt wrote that conditions like these "aren't permanent, and aren't consistently enforced" [15]. Whether it has any force depends on where it reports. A board answerable only to Paramount has no enforcement route; a board answerable to a court can have its findings acted on.
Free Press put the objection in commercial terms, saying the deal's "minor concessions are largely unenforceable behavioral remedies that Bonta had previously denounced, and in some cases promise less than the two companies are already doing as standalone competitors" [8].
Free Press also said the concessions came after Paramount owner David Ellison "made multiple threats to move the studio out of California unless the attorneys general dropped their lawsuit" [9]. Governor Gavin Newsom had been advocating a settlement publicly for a month and was in "constant contact" with the parties as talks moved over the weekend, according to Deadline, which reported that he cautioned both sides to find terms addressing "core concerns" for Hollywood and the state [11]. Deadline also reported harsh backlash among Congressional Democrats and A-listers including Mark Ruffalo as the talks accelerated [14]. A source close to power players in Sacramento told Deadline, "It's jobs, job, jobs, that's what this all about" [17].
Anyone who has accepted a promise in place of a structural change can test this one with four questions: who publishes the count, what the definition lets the company exclude, what happens in the year the count comes in at 27, and what year the obligation lapses.
What to watch
- Publication of the settlement text. It would show whether the release pledge carries a definition, a penalty and an end date.
- Whether the at least four attorneys general who resisted settling sign the same terms or pursue their own.
- Who the CNN board reports to, and whether its findings land anywhere a court can act on them.