“Theaters, distributors, and the viewing public should not be forced to rely on Defendants’ empty commitments to protect them from the effects of an unlawful merger. They are better served if Paramount and Warner Bros. continue to compete for their business,” the lawsuit said.
States do the job DOJ “refused to do”
States further alleged that the merger will give Paramount too much control over the market for TV programming, and would be able to use that as leverage in bargaining with distributors:
A distributor who rejects the combined company’s fee demands would risk losing, for example, CNN for news viewers, Nickelodeon and Cartoon Network for family households, HGTV and Food Network for lifestyle audiences, and TNT and TBS for sports and entertainment viewers. Faced with this threat, distributors would likely be forced to accept higher fees to distribute basic cable channels than they would absent the proposed merger. Those higher fees will likely be passed on to their subscribers in the form of higher monthly bills.
John Bergmayer, legal director at advocacy group Public Knowledge, said that “state attorneys general are doing the job the Justice Department refused to do.” He said the merger “would give one company more power over what gets made, what theaters can show, what distributors must pay, and what audiences ultimately see and pay for,” leading to “fewer films, worse terms for theaters, higher ticket prices, higher cable bills, and less investment in programming.”
We contacted Paramount today and will update this article if it provides a response. Before the lawsuit was filed, Paramount told Deadline: “We continue to engage constructively with the remaining few regulators around the world still considering the merger, including state attorneys general, and are prepared to address any legitimate antitrust issues.”
Paramount also said it is “confident this transaction raises no such concerns, as demonstrated by the dozens of antitrust authorities around the world that have carefully reviewed the transaction and either cleared it or concluded that it does not violate applicable competition laws.”
