Paramount CEO David Ellison is taking another page out of the Veruca Salt playbook of stomping your feet until you get what you want. Ellison has told executives of Paramount that he will begin the process of exiting California on October 1 unless State Attorney General Rob Bonta negotiates a settlement regarding the antitrust suit regarding the takeover of Warner Bros. Discovery.
Bonta is leading a group of 12 state Attorneys General that have formed like Voltron in an antitrust lawsuit against Paramount in its attempted $110 billion (potentially $111 billion) takeover of Warner Bros. Discovery. Paramount had agreed to pause any business with the takeover until the trial ends or June 2027. The trial has been set to begin on March 2.
Paramount also faces a lawsuit from the Writers Guild of America as well as one filed by shareholders.
Bonta has released a statement regarding the threat:
In a span of weeks, Paramount agreed to halt the merger until a court decision or until June 2027, asked for a November trial, and is now back with another attempt to blackmail the state into letting an illegal deal through. Paramount has lost the plot as it continues to lose in court. It didn’t work the first time — on the eve of our July lawsuit — and it won’t work this time.
If Ellison follows through with his threat, the relocation would begin with the company’s headquarters and followed by studio jobs. The rumor or Ellison and Paramount leaving the state have swirled for some time.
Paramount faces an increased cost to its deal if it’s not closed by September and the trial alone adds about $1.3 billion to the $110 billion price tag. If the deal falls apart altogether, there’s a $7 billion termination fee. Warner Bros. Discovery can walk if the deal isn’t closed by June 4.
Paramount has been attempting to wage a PR campaign in its favor with Ellison rallying his allies to write op-eds supporting the merger. But, Paramount seems to be hurting its cause by trying to play public opinion as opposed to making concessions with the Attorneys General that may lessen their opposition.
With each volley, and the further strain on the Ellison fortune, the chances of this deal collapsing seems to increase with each day.
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Source: Graphic Policy
