California’s case against Paramount landed yesterday with a whimper, not a bang. Rob Bonta and 11 other attorneys general argue that a combined Paramount-Warner Bros. Discovery would hurt competition in three markets: general film distribution, blockbuster film distribution, and cable TV. Paramount plans to contest Bonta’s definition of “blockbuster” films as a market unto themselves — with the recent success of Obsession and Backrooms, who’s to say? — and argue that cable TV competition remains robust.
Still, Paramount is clearly alarmed by Bonta’s lawsuit. Semafor reported Sunday that Paramount CEO David Ellison might move the company’s operations out of California if the state successfully blocked the deal. And Paramount’s antitrust lawyer, Jeffrey Kessler, told CNBC’s David Faber Tuesday morning that the deal would not close by July 22, as the companies planned. Paramount is on the hook for $625 million in extra money to shareholders for each quarter that the deal doesn’t close, starting in September.
The real issue for Ellison is clear: This is going to cost him.