The Paramount merger with Warner Bros. Discovery faces a last-minute challenge from subscribers who want the Supreme Court to stop the transaction. Their Oct. 5 application asks Justice Elena Kagan to intervene while the court considers their case, The Hollywood Reporter reported.
The companies had announced an expected Oct. 6 closing, subject to customary conditions. An application asking the court to intervene does not establish that the justices have ruled on the merger.
Why subscribers oppose the Paramount merger
U.S. District Judge Araceli Martínez-Olguín approved a settlement with 12 states on Sept. 30, The Associated Press reported. The Hollywood Reporter said she also denied the subscribers’ request for a temporary restraining order.
The subscribers contend that combining the businesses would reduce competition in streaming, news and movie distribution. They argue that the settlement leaves those concerns unresolved and that the judge overlooked evidence supporting their request. Those are the plaintiffs’ arguments, rather than findings by the Supreme Court.
Three commitments in the states’ settlement
California Attorney General Rob Bonta’s office outlined the enforceable terms when the states reached their agreement. Three provisions address film output, cable negotiations and news operations.
1. A five-year movie schedule
The combined company must release 30 films annually in the first two years and 32 annually in the next three. The agreement also requires at least four independent films each year and additional spending on U.S. production.
2. Separate cable negotiations
For five years, Paramount’s basic cable channels must negotiate separately from Warner Bros.’ channels. The states say that separation is intended to preserve competition over carriage prices.
3. Newsroom oversight
A news editorial independence board is meant to help protect CBS News and CNN. An independent monitor will oversee compliance with the settlement.
The court dispute accompanies a leadership transition. Read our reports on the Paramount-Warner Bros. film team and David Zaslav’s farewell for more on the executives affected.
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