California AG Accuses Paramount of Misinformation in WBD Merger

California Attorney General Rob Bonta has accused Paramount Global of spreading misinformation and engaging in undisclosed side deals concerning the proposed acquisition of Warner Bros. Discovery (WBD). This accusation comes in the context of a lawsuit filed on July 13 by California, New York, and ten other states seeking to block the $111 billion merger between Paramount and Skydance, which is reportedly being orchestrated by David Ellison's Paramount. The lawsuit aims to prevent what regulators perceive as a monopolistic consolidation within the media industry.

Bonta's office specifically stated its intent to win the legal battle against the merger, asserting that Paramount's actions are designed to "muddy the waters" and mislead the public and regulatory bodies. The California AG's office has indicated that Paramount's narrative surrounding the deal is not entirely truthful and that there are additional, potentially problematic, agreements in play that have not been disclosed. This suggests a complex web of negotiations and incentives that extend beyond the publicly announced terms of the Skydance-Paramount transaction.

A federal judge recently delivered a setback to Paramount by scheduling the antitrust action for a two-week trial in March 2027. This decision means the legal scrutiny of the proposed merger will continue for an extended period, allowing for a thorough examination of the claims and counterclaims. The judge's ruling underscores the seriousness of the antitrust concerns raised by the coalition of states and highlights the potential for significant legal hurdles to the deal's completion.

The ongoing legal proceedings and Bonta's strong statements indicate a significant challenge to Paramount's strategy. The merger, if approved, would combine two major media entities, raising concerns about market concentration, potential job losses, and the impact on content diversity and consumer choice. The states' lawsuit focuses on antitrust violations, arguing that the proposed acquisition would harm competition. The California AG's specific allegations of misinformation and side deals add another layer of complexity and potential legal jeopardy for Paramount and its allies in the proposed transaction.