Paramount-Warner Bros. Merger Settlement Faces Criticism Over Cable Price Protections
A media and free-speech group argues that the settlement resolving California’s antitrust concerns over the proposed Paramount-Warner Bros. merger would not prevent the combined company from raising prices in some markets.
Settlement requires separate cable licensing negotiations
The settlement requires the combined entity to negotiate separately for licenses to the underlying cable channels owned by Paramount and Warner Bros. for five years. California Attorney General Rob Bonta’s office said the provision would preserve “existing competitive dynamics between businesses” and help “keep prices down for consumers.”
However, the requirement does not apply to premium cable channels, streaming services, or broadcast content.
In a filing, the free-speech and media group argued that the combined company could still use its market power in other areas—including the combination of HBO and Showtime, HBO Max and Paramount+, and CBS—to seek higher prices in negotiations involving underlying cable channels.
The filing also said the settlement does not resolve California’s argument that combining the companies’ cable portfolios could reduce investment in underlying cable channels.
Bonta defends the Paramount-Warner Bros. agreement
Bonta said the settlement would lead to “major investments in domestic film production” and create “enforced guardrails to keep cable prices competitive.” He emphasized that the agreement was “not a vote of support for this merger.”
“However, we believe this settlement is the best course of action to resolve the antitrust concerns in all markets alleged in our lawsuit, protect competition and consumer choice, and put workers’ needs, concerns, and futures first,” Bonta said.
Writers Guild settles merger lawsuit
The Writers Guild of America reluctantly settled its lawsuit against the merger after learning about the agreement between Paramount and California. The proposed settlement bars CBS News from firing writers for five years and requires $17.5 million to be paid to the guild’s health fund.
The Writers Guild said it “continues to believe that the merger will harm writers and the industry as a whole.”
“But now that the Attorney General has settled with Paramount, the WGA must contend with the reality that, as a nonprofit organization, it must navigate complex antitrust cases alone, without the support of government enforcement officials, that cost millions of dollars to pursue,” the guild said.
Other states reportedly drop opposition
According to a Bloomberg article, Massachusetts, New York, Connecticut, and Minnesota initially opposed the Paramount-Warner Bros. deal. The attorneys general of those states reportedly concluded that the cost of continuing a legal battle could not be justified without California’s lead.
California’s settlement and the WGA agreement could help clear the way for the proposed Paramount-Warner Bros. merger, while critics continue to question whether the deal will protect competition, investment, and consumer choice across cable, streaming, and broadcast markets.
Source: arstechnica.com