DOJ issues subpoenas as probe of Warner Bros. Discovery-Paramount deal intensifies: report
Justice Department Subpoenas Issued in Paramount Skydance-Warner Bros Discovery Acquisition Investigation
The Justice Department has sent subpoenas in its investigation of Paramount Skydance’s acquisition of Warner Bros Discovery, according to three sources familiar with the matter as reported by Reuters.
The inquiries indicate the DOJ’s progress in examining the $110 billion acquisition that would merge the two major studios, their streaming platforms, and news operations.
Hollywood and Wall Street are closely monitoring this deal, as its success could potentially lead to job cuts while blocking it may cost Paramount $7 billion.
The DOJ is particularly interested in understanding the impact of the acquisition on studio output, content rights, competition among streaming services, and movie theaters.
Acting Assistant Attorney General Omeed Assefi emphasized that Paramount will not receive preferential treatment due to political factors in the approval process.
Paramount’s Chief Legal Officer, Makan Delrahim, mentioned at an antitrust conference that they anticipate authorities from various regions to review the deal.
The European Commission and Canada are actively engaging with third parties regarding the acquisition, with the California Attorney General’s office also showing interest.
Paramount has been actively pursuing the deal, offering incentives to Warner Bros shareholders and expecting significant cost synergies through streamlining operations.
Labor and Theater Concerns
Concerns in the US revolve around potential limitations on buyers for films and shows post-merger, as well as the possibility of massive layoffs to achieve cost savings.
The DOJ has reached out to independent production companies to assess the deal’s impact on competition, while the Teamsters union and theater owners express worries about job losses and reduced movie production.
Regulators are being urged to consider past lessons when it comes to studio consolidation and its consequences on the industry.
