Trump’s DOJ approves Paramount-Warner Bros. merger, as potential state lawsuits loom

An aerial view of the Paramount logo on the water tower at Paramount Studios on February 23, in Los Angeles, California. (Justin Sullivan/Getty Images via CNN Newsource)

The Trump administration has given the green light for Paramount Skydance to take over Warner Bros. Discovery in a mega-merger that will reshape Hollywood.

Friday afternoon’s sign-off by the Department of Justice, while expected, was a key step in Paramount’s quest to acquire CNN, HBO, the Warner Bros. movie studio and other Warner Bros. Discovery assets.

The DOJ said in a statement that “the transaction is not likely to result in harm to competition or American consumers, including with respect to: (1) streaming video on demand (“SVOD”); (2) linear television; and (3) studio development, production, or distribution of films for theatrical release.”

Antitrust experts noted that the government did not require Paramount to sell any assets or make any other concessions as a condition of the approval.

Paramount said it was grateful to the Justice Department for the “thorough review,” and added, “We remain focused on completing the transaction as soon as possible and delivering its benefits to consumers, creators, and the entertainment industry as a whole.”

Paramount and Warner Bros. Discovery (also known as WBD) still face a potential lawsuit by a coalition of state attorneys general who have said the Trump administration is failing to enforce antitrust law.

The state-level legal action could slow the merger process, though Paramount executives say such a lawsuit would be meritless.

A spokesperson for California attorney general Rob Bonta said in response to the DOJ decision that “the merger of Warner Bros and Paramount remains under investigation by the California Department of Justice.”

Sen. Elizabeth Warren, one of the deal’s most vocal critics, called the DOJ approval “terrible news for every American who doesn’t want Trump-aligned billionaires to control what they watch and how much they pay,” and urged state attorneys general to step in. “The Paramount-Warner Bros. deal has reeked of corruption and influence-peddling,” the senator said. “This fight isn’t over. State AGs must block this merger.”

The companies are also still awaiting key reviews by the European Union and the United Kingdom. Regulators there are examining whether the deal could harm competition.

Paramount says the deal is “fundamentally pro-competitive.” As for the prospect of taking control of CNN, which has raised alarms among press freedom groups, the company says it is committing to “invest in the future of journalism, not diminish it.”

Paramount has sought to secure all the necessary approvals and take control of WBD in the third quarter of the year, meaning by the end of September. Internally, Paramount leaders have talked about possibly clearing all the hurdles in July, though the timeline of the European reviews makes that unlikely.

The audacious bid for WBD — which is many times larger than Paramount — has been a source of controversy for months, partly due to Paramount’s close ties to U.S. President Donald Trump and the company’s perceived efforts to win favour with his administration.

The deal is bankrolled by Trump ally Larry Ellison, the billionaire co-founder of Oracle, whose son David Ellison became CEO of Paramount through a merger last year.

Critics of the WBD deal have pointed to Paramount’s overhaul of CBS News and programs like “60 Minutes” — long a target of Trump’s ire — as evidence of the company’s willingness to accommodate political pressure.

Bruce Springsteen called out Paramount for appeasing Trump on the company’s flagship network, CBS, during one of the final episodes of “The Late Show with Stephen Colbert” last month. After criticizing Trump, Springsteen said, “Larry and David Ellison feel they need to kiss his ass to get what they want.”

Paramount executives have privately dismissed that narrative, though the Ellisons have said little about the matter in public.

Trump has publicly commented on Paramount along the way, sometimes portraying the Ellisons as his friends and specifically expressing interest in the family taking over CNN. “It’s imperative that CNN be sold,” Trump said in December, back when Netflix was winning in a complex bidding war for the assets. The comments indicated he preferred Paramount’s hostile takeover bid.

Paramount prevailed in February, and then the regulatory review process began.

In late April, Paramount held an unusual dinner in Washington with Trump, members of his cabinet, and a handful of CBS News journalists and executives. Among the guests: The head of the Justice Department, acting attorney general Todd Blanche, and the chair of the FCC, Brendan Carr.

In May, the Justice Department’s review of the deal proceeded apace, with depositions of some Paramount executives and a long meeting with David Ellison.

The questioning was led by career employees, not Trump appointees, a person familiar with the process told CNN.

Still, the entire regulatory review was clouded by charges of political favoritism and cronyism. Numerous Democratic lawmakers have vowed to investigate matters relating to Paramount and Trump if their party prevails in the midterm elections.

“We are grateful for the Department of Justice’s thorough review of this transaction, as well as the work of the other agencies that have completed their reviews and provided clearance to date,” Paramount said Friday. “This deal is pro-competitive, resulting in a stronger company better positioned to compete against dominant technology platforms in an industry increasingly defined by intense competition for audiences, talent, technology, and investment.”