Click here to read the full article.
Paramount announced Friday that it has won approval from Mexico’s competition authority for its merger with Warner Bros., leaving only 12 state attorneys general standing in the way of closing the deal.
In a statement,
Paramount said it has now won approval from regulators representing 68 countries, including the European Union, China, Canada, Brazil and the U.K. CEO David Ellison urged the 12 states to negotiate a settlement that would allow the deal to go through, instead of proceeding to a federal trial next March.
“Rather than support a stronger Hollywood and deliver tangible commitments to invest in for the benefit of labor, talent and other industry participants, the current path the 12 State AGs are on inflicts harm without benefit to their own constituents,” the company said. “The better path would be to resolve this through a settlement that would serve the interests of workers, consumers and the consumers in each of the 12 states.”
California and 11 other states sued in federal court in Oakland in July, arguing that the proposed merger will illegally reduce competition in the basic cable, theatrical, and blockbuster film markets. The Writers Guild of America has pursued its own suit, arguing that the deal also illegally reduces the number of buyers for writers’ work.
After Judge Araceli Martinez-Olguin granted a temporary restraining order to pause the deal for 28 days, Paramount agreed to put the merger on hold until the trial. Hoping for a speedy resolution, Paramount asked for a trial date in November. The company will have to start paying a $7 million-a-day “ticking fee” to Warner Bros. investors starting on Sept. 30, and continuing until the deal closes.
Last week, Martinez-Olguin scheduled the trial for March 2, after the states sought additional time to gather evidence and depose executives and other witnesses.
Ellison said Friday that the company still expects to win at trial, but is prepared to offer concessions to get the deal done sooner than that.
“While we remain confident that the law and the facts are on our side, we have offered commitments and concessions and remain open to working constructively with the State AGs to find a path forward in the interest of our employees and the creative community in California and across the world – just as we have with the regulators in 68 countries worldwide,” he said.
Paramount also argued that the delay “will impose needless costs from penalty fees, litigation expenses and business disruption.”
“As a business with many stakeholders, including pension and state retirement funds, Paramount is required to consider how it can absorb the unnecessary additional financial costs while preserving the longer-term strength of the combined company,” the company stated.
California Attorney General Rob Bonta has said repeatedly that the states are focused on winning at trial, rather than reaching a settlement, and that Paramount’s proposed conditions do not go nearly far enough to address the competition concerns raised in the lawsuit. Bonta has argued that “behavioral” remedies — such as promises to release a certain number of films — have proven ineffectual in the past, and has said that he is focused on structural changes that Paramount has been unwilling to make.
A Paramount spokesperson declined Friday to spell out the concessions that have been offered.
Paramount has also threatened to begin the process of moving out of California if no deal can be reached by Oct. 1.
