FCC Chairman Critiques Antitrust Challenge to Paramount-Warner Bros. Deal
Brendan Carr, the Chairman of the Federal Communications Commission, has criticized the efforts of several states to block the proposed acquisition of Warner Bros. Discovery by Paramount Skydance. He expressed skepticism regarding the likelihood of success for a coalition of 12 state attorneys general, primarily from California, in their legal challenge to the $110 billion deal.
During an interview, Carr stated, “I doubt it,” when asked about the states’ chances of winning their lawsuits at the Hill Nation Summit in Washington, D.C. He mentioned reports indicating that California might consider withdrawing its antitrust lawsuit if a condition—spinning off CNN—were met.
“There’s a report suggesting California could drop antitrust litigation if CNN is removed from the deal,” Carr noted, expressing confusion about how a single cable channel’s inclusion could fundamentally change the antitrust argument. “This isn’t really a legitimate antitrust case, though ultimately, it will be up to the court.”
His remarks followed a recent lawsuit from the coalition of state attorneys general aiming to halt the merger. Even if the states do not succeed, the litigation could result in substantial costs. Shareholders of Warner Bros. Discovery would be due additional payments if the deal closes after September 30, thus increasing overall transaction expenses.
Delays forced by the court could complicate reaching financial agreements and other conditions necessary for closing, creating additional pressures for both companies involved. Carr also refuted claims that the FCC might have received gifts from Paramount, calling such allegations “completely unfounded.”
Concerns raised by the states include potential adverse effects on competition in theatrical film distribution and cable TV programming, suggesting that the merger could give the new entity undue power over theaters and pay-TV distributors, potentially leading to higher prices and fewer movie options.
The coalition, which includes states like Arizona, Colorado, and New York, is pursuing a temporary restraining order and a preliminary injunction to stop the merger while litigation is ongoing. In a separate legal move, a shareholder derivative suit has been filed in Delaware seeking to block Paramount’s acquisition of Warner Bros. Discovery, alleging breaches of fiduciary duty by company executives related to their dealings with the Trump administration.
Reports indicate that Paramount has assured California state regulators it would maintain studio operations within the state, although there are rumors that it may relocate if the merger faces significant hurdles. The ongoing legal disputes have already ignited interest from Tennessee, where Lt. Gov. Stuart McWhorter reached out to Paramount, promoting the state’s favorable business climate as a potential relocating option.
No formal relocation plans have been disclosed by Paramount, though public comments from various stakeholders underscore the contentious atmosphere surrounding this merger. Key figures have expressed concerns that the acquisition might negatively impact consumers and job opportunities in California.
