Paramount and 12 States Defend Antitrust Settlement Against Booker

Paramount and a coalition of 12 state attorneys general defended their antitrust settlement on Monday against criticisms raised last week by New Jersey Sen. Cory Booker.

In separate filings, the two sides argued that the deal was vigorously negotiated, has “teeth,” and should not be subjected to an independent “public interest” review. Paramount argued the deal resolves the states’ primary concern: a reduction in theatrical releases after it merges with Warner Bros. Discovery.

“The proposed consent decree eliminates that risk of post-merger output reductions,” Paramount’s lawyers wrote. The deal, they added, “provides certainty for exhibitors and the broader industry: a guaranteed, enforceable pipeline of new releases every year.”

Booker objected to the deal in a letter last Thursday, arguing the terms do not go far enough to remedy the anticompetitive harms of the merger. Among his concerns: the consent decree expires after only five years, leaving no protections in year six.

Paramount countered that the five-year term was reasonable given the fast-changing nature of the film and TV business.

“None of the parties know what consumer demand will look like six years from now or how competition will change in the intervening years in this dynamic industry,” Paramount’s lawyers wrote. “In fact, implementing a term any longer could hamper the Combined Entity’s ability to compete in the future because of changing consumer demand or new innovations, which would undermine the purpose of the antitrust laws to maintain and enhance competition.”

The state attorneys general also defended the five-year term.

“The parties bargained for a five-year term,” they wrote. “It reflects a balance between preserving present levels of competition, requiring additional years of oversight, and the potential alternative of Warner Bros. seeking to merge with a different competitor.”

Booker also targeted the “editorial independence board” that will oversee operations at CNN and CBS News. He noted that editorial issues were not part of the states’ complaint, and that the board’s independence is limited because Paramount will appoint its members.

“The Board was structured to be as self-executing and efficient as practicable in order to ensure independence and avoid any claims related to government-control of the Board,” Paramount’s attorneys wrote.

The states argued the board raises no First Amendment concerns, because the deal will not put the court in the position of adjudicating news judgments.

“The Decree defines the Board’s structure, not its speech, and editorial principles established by the Board will reflect private conduct,” the states argued.

Judge Araceli Martinez-Olguin ordered the parties last week to respond to Booker’s letter. The court also received amicus briefs from the Block the Merger coalition and from the League of United Latin American Citizens, both raising objections to the deal.

Martinez-Olguin has yet to sign off on the consent decree. She said last week that she would issue a ruling in “due course.”