Paramount Suit Settlement Delayed As Judge Grants Opponents' Hail Mary Move

Mere hours before a court hearing on the much criticized settlement between Paramount and a coalition of blue state attorneys general on the $111 billion merger with Warner Bros Discovery, ParaBros foes have gained a victory that could see an expensive delay on the deal closing.

via: Indie Wire

Little more than an hour before a judge was set to hold a Thursday morning hearing approving the settlement agreement between Paramount and the attorneys general in the antitrust suit, a judge has granted a last-ditch emergency motion filed by the members of the grassroots Block the Merger coalition.

In an amicus brief motion, Judge Araceli Martínez-Olguín granted the emergency motion and gave the parties a hard deadline of no later than 12:01 a.m. tomorrow morning to get everything in place. Today’s 11 a.m. hearing is still in place as of this moment.

The organizations Free Press, the Committee for the First Amendment, the Freedom of the Press Foundation, the Future Film Coalition, and the International Documentary Association all said in a joint statement, “The consent decree the state AGs agreed to in a backroom deal is weak, unenforceable, and leaves workers, journalists, and consumers in the dust. The settlement fails to address the grave dangers this merger poses — and no amount of spin can change that. Judge Araceli Martínez-Olguín’s ruling will allow the public to weigh in on this important issue and ensure the interests of those who will actually pay the price for the Ellisons’ sweetheart deal that the AGs failed to adequately represent are heard. We look forward to explaining that in further detail in our brief due at midnight tonight.”

Block the Merger in its filing from earlier today called the settlement deal from California AG Rob Bonta bad “for the future of film, entertainment, independent journalism, and a strong democracy in this country,” and in a statement today members of Block the Merger called Bonta’s deal “weak and unenforceable.” Members of the group earlier this week were protesting outside Paramount headquarters in Hollywood following the surprise settlement news.

“Hundreds of thousands of people across the country called on state attorneys general to enforce the law and to protect consumers, workers and free speech,” said Free Press Co-CEO Jessica J. González, who serves as co-counsel on the motion. “The weak and unenforceable deal the AGs struck with Paramount leaves us in the lurch. We deserve our day in court.”

“We believe the consent decree fails to meaningfully address or mitigate the harms that will be caused by this monopoly merger to the entertainment industry, diverse storytelling, independent filmmaking, consumer interests, a free press, First Amendment rights, and fundamentally, democracy,” stated Mara Verheyden-Hilliard, Steering Committee for the Committee for the First Amendment and First Amendment litigator. “It does not serve to benefit anyone except the owner family of Paramount and those holding political power who will use this corporate consolidation as a proxy force for First Amendment suppression of disfavored expression and viewpoints.”

Paramount did not respond to a request for comment.

The settlement agreement, which was reached on Monday, September 21, required that Paramount commit to concessions for a period of five years, with some of the concessions being that if it failed to meet its promised 30 movies released annually, it would be forced to divest its stake in Miramax and it would have to pay $30 million to a fund for Hollywood union members. It was also required to keep some of the same theatrical terms during the duration of the settlement, it would have to negotiate Paramount and Warner Bros. Discovery cable channels as separate entities, and it agreed to spend an extra $1.5 billion annually on production in the United States. It also required a panel of journalists to be put in place to maintain the editorial independence of CNN and CBS News.

Block the Merger saw the deal as toothless, as it didn’t force any divestitures, and it didn’t assure that production dollars would be spent in California specifically.

The timing of this hail mary motion is significant because Paramount needs to begin paying a ticking fee of several million dollars a day to WBD shareholders for every day past October 1 the deal fails to close. With the settlement reached, the hope was that this would be closed within a matter of weeks.