The Board of Supervisors Tuesday will consider a motion calling for the county to support California’s lawsuit seeking to block Paramount Skydance’s proposed takeover of Warner Bros. Discovery, one day after a federal judge temporarily halted the $110 billion merger.
“For too long, working people have borne the cost of corporate consolidation, while jobs disappear and production leaves our region,” Supervisor Lindsey Horvath, who introduced the motion, said in a statement. “Our economic analysis shows this merger could put thousands of local jobs at risk. As the global capital of the creative economy, Los Angeles County has a responsibility to help make the case against this merger by providing the facts, supporting Attorney General (Rob) Bonta’s litigation, and standing up for the workers, small businesses, and communities that depend on this industry.”
The motion calls for the county to support the lawsuit filed last week in Northern California, possibly through the provision of legal support or the filing of an amicus brief in court.
The board will also consider a proposed amendment to the motion by Supervisor Kathryn Barger, asking that county attorneys provide a written report in 60 days with “an analysis of all other legal options for the County to pursue to protect and preserve the television and film industry, including jobs, in Los Angeles County from the impacts of the prospective merger.”
Earlier this year, at the direction of the Board of Supervisors, the county Department of Economic Opportunity prepared a report on possibly impacts of the proposed merger. That report estimated that the move could lead to nearly 2,500 job losses in the county, and about 6,000 globally.
The jobs at risk would mainly be in corporate, tech, real estate and other shared functions due to duplicative roles across the two companies, according to the report. The department noted in the report that its job-loss estimates should not be read as a layoff forecast, saying the document only defines the scale of possible employment impacts that may be subject to consolidation.
On Monday, U.S. District Judge Araceli Martinez-Olguin issued a temporary restraining order placing a 14-day hold on the proposed merger while the court considers whether to issue a preliminary injunction blocking the deal during the litigation. The judge set an Aug. 3 hearing on the matter.
Bonta applauded the ruling, calling it “a critical first win in our case to ensure this megamerger never sees the light of day.”
In announcing the lawsuit last week, Bonta argued that the merger, which has already been approved by the U.S. Department of Justice, would led to higher prices for consumers and a reduction in entertainment content.
Bonta said the $110 billion merger — considered one of the biggest media deals in history — would put one company in charge of nearly one-third of all theatrical motion picture and basic cable programming.
Other states joining the lawsuit were Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington.
The court heard arguments Friday before Martinez-Olguin declined to immediately rule on the states’ request for a temporary restraining order.
Paramount Skydance issued a statement last week saying the lawsuit “reflects a fundamentally flawed application of the antitrust laws and is wrong on both the facts and the law.”
“We will vigorously defend the transaction and demonstrate that this challenge is inconsistent with sound competition policy and the competitive realities of the media marketplace,” according to the company. “Delaying this transaction will only harm entertainment workers who have already suffered over recent years as technology has disrupted their livelihood and cost California tens of thousands of entertainment jobs.
“The combination of Paramount and WBD will create a stronger, well-capitalized, creative-first media company that is better positioned to compete with companies like Netflix that have come to dominate the industry for audiences, premium content, and creative talent. Put simply, any attempt to block this transaction undermines the very principles antitrust law is designed to promote: more competition, more choice for consumers, and more opportunities for creators and workers.”
The estimated $110 billion transaction would combine Paramount Pictures and Warner Bros., studios whose histories span more than a century. The combined company would also include the Paramount+ and HBO Max streaming services, the CBS broadcast network and cable channels including CNN.
David Ellison, CEO of Paramount Skydance, has previously said the merger would honor the legacy of both companies while creating a next-generation media and entertainment business. Ellison is the son of billionaire Oracle co-founder Larry Ellison.
If the deal closes, David Ellison would control CBS News and CNN, Paramount Pictures and Warner Bros., and subscription streaming services Paramount+ and HBO Max.
The deal has faced opposition from some entertainment industry professionals and elected officials who argue it would further consolidate ownership in the media industry.
More than 1,000 entertainment professionals signed an open letter in April opposing the merger, contending it would reduce competition at a time when the industry is already highly concentrated.