Democratic lawmakers and California’s attorney general expressed deep skepticism about Paramount Skydance’s potential takeover of Warner Bros. Discovery after Netflix abruptly pulled out of the bidding war Thursday, the latest twist in a contentious and politically loaded corporate drama.
WBD’s board of directors still needs to formally approve Paramount’s offer, and any deal between the two Hollywood giants — the owners of storied film studios and top streaming apps — requires sign-off from Justice Department regulators. The board could meet as early as Friday, according to a source familiar with the matter.
“Paramount/Warner Bros. is not a done deal,” California Attorney General Rob Bonta said in a statement. “These two Hollywood titans have not cleared regulatory scrutiny — the California Department of Justice has an open investigation, and we intend to be vigorous in our review.”
Bonta, a Democrat who took office in 2021, did not immediately respond to a request for comment on the next steps in his office’s investigation. The U.S. Justice Department declined to comment on the WBD-Paramount transaction.
The combined entity would be led by David Ellison, the son of Oracle mogul Larry Ellison, a close ally of President Donald Trump. “Larry Ellison is great and his son David is great,” Trump told reporters in October. “They’re friends of mine. They’re big supporters of mine, and they’ll do the right thing.”
In recent months, lawmakers in both parties have warned that the takeover of WBD by either Netflix or Paramount risked concentrating too much power in one media and entertainment company. Sen. Elizabeth Warren, D-Mass., a key voice on competition issues, reiterated those concerns after Netflix dropped out Thursday afternoon.
“A Paramount Skydance-Warner Bros. merger is an antitrust disaster threatening higher prices and fewer choices for American families,” Warren said in a statement.
Warren alluded to Netflix co-CEO Ted Sarandos’ meeting at the White House on Thursday: “What did Trump officials tell the Netflix CEO today at the White House?” The sit-down preceded Netflix’s announcement that it would not match Paramount’s offer for WBD assets.
“A handful of Trump-aligned billionaires are trying to seize control of what you watch and charge you whatever price they want,” Warren added. “With the cloud of corruption looming over Trump’s Department of Justice, it’ll be up to the American people to speak up and state attorneys general to enforce the law.”
The White House did not immediately respond to a request for comment on Warren’s statement.
Politics have played a prominent role in the fight for WBD. Trump, who at one point said he might weigh in on the deal, told NBC News in early February he would not be “involved” in the proceedings. Then, last week, he warned Netflix it would “pay the consequences” if it did not fire board member Susan Rice, a former Biden administration official.
The Senate Judiciary Committee’s antitrust panel had planned to hold a March 4 hearing on competition issues related to the Netflix-WBD tie-up. In an email Friday morning, a spokesman for Sen. Mike Lee, R-Utah, the chairman of the subcommittee, said that the hearing would be canceled.
“Netflix’s proposed acquisition of Warner Brothers raised serious antitrust concerns,” Lee said. “When a massive streaming platform consolidates even more TV shows and movies behind a single paywall, American families lose. Walking away from this deal is a win for consumers.”
Lee’s statement came after Sen. Cory Booker, the top Democrat on the antitrust panel, “renewed his invitation” for David Ellison to appear before the subcommittee, an aide to the New Jersey lawmaker said.
Alvaro Bedoya, a former Democratic commissioner on the Federal Trade Commission, which enforces antitrust law, blasted the proposed deal in a post on X. “One family is about to control CBS, CNN, HBO, and TikTok,” Bedoya wrote, referencing Larry Ellison’s role in a consortium of investors taking over TikTok’s U.S. operations. “Block this rotten deal.”
The international reach of both WBD and Paramount means public officials outside the U.S. will also have an opportunity to weigh in, including European Union regulators.
Paramount’s bid for WBD is for the entire company, including the Warner Bros. film studio, HBO, the HBO Max streaming platform and a suite of cable channels that includes CNN. Netflix was looking to acquire only WBD’s studio and streaming units, pending a spinoff of the cable portfolio into a separate entity.
The prospective merger between WBD and Paramount would put CNN under the same roof as CBS News, a consolidation that could lead to job cuts and other big changes. Ellison has attempted to transform CBS News, most notably hiring former New York Times opinion columnist Bari Weiss as editor-in-chief of the division.
The upheaval at CBS News has made national headlines in recent months. Weiss faced scrutiny after delaying a “60 Minutes” segment about the Trump administration’s deportation policies. She said at the time that the reporting was not “ready” for broadcast, and an updated version of the segment later aired.
Craig Aaron, the co-CEO of Free Press, a consumer advocacy group, excoriated the potential WBD-Paramount merger, warning of dire consequences for the news media.
“The Netflix deal was disastrous, but this new one is even worse,” Aaron said in part. “The idea that Paramount should be allowed to control CBS and CNN should be unthinkable.” (Free Press has no relation to The Free Press, the news and commentary publication co-founded by Weiss.)
The Wall Street Journal reported in December that David Ellison promised Trump administration officials he would make sweeping changes at CNN if Paramount acquired WBD. NBC News has not verified that report.
Ellison’s Skydance formally took over Paramount last year in a deal valued at $8 billion. The transaction required approval from the Trump administration’s Federal Communications Commission, led by Chairman Brendan Carr.
In seeking approval, Ellison assured the FCC that his incarnation of Paramount would focus on “American storytelling” and scrap corporate diversity, equity and inclusion programs.
Netflix’s planned takeover of WBD also faced pushback from elected officials, including 11 Republican state attorneys general who had called on the Justice Department to scrutinize that transaction.
The state attorneys general did not immediately respond to messages asking whether they would call for similar inquiries into the Paramount deal.
Sen. Adam Schiff, D-Calif., said Ellison’s company deserves the same level of scrutiny.
“What was true for Netflix is still true now for Paramount,” Schiff said on X. “The merger of two of Hollywood’s biggest studios must be subject to the highest levels of scrutiny, free from White House political influence, to determine its impact on American jobs, freedom of speech, and the future of one of our nation’s greatest exports.”
The high-stakes corporate maneuvering comes at a perilous time for Hollywood as it attempts to bounce back from Covid-era box office declines and a series of labor strikes. The traditional film and television industries are also grappling with the rise of AI and the wave of productions moving overseas because of tax breaks and other economic benefits.
“We need to bring moviemaking back to our shores, increase production, and invest in our workforce,” Schiff said. “For the sake of America’s moviemaking workforce and movie lovers everywhere, I will continue to push all parties to do their part.”
Sen. Chris Murphy, D-Conn., did not mince words on Friday in a post on X, explicitly promising to break up Paramount’s media empire if Democrats retake power in Washington.
“Paramount should enjoy its growing news monopoly while they have it because when Democrats win back power we are going to break up these anti-democratic information conglomerates,” Murphy said. “All of them.”