The Paramount/Warner Deal’s Dubious Settlement

The recent settlement between California and Paramount Skydance regarding their $111 billion merger with Warner Bros. Discovery has left many wondering about its implications for media ownership and regulation. On the surface, it appears to be a routine business deal – two massive entertainment companies combining forces to create an even more formidable entity. However, scratch beneath the surface, and you’ll find a complex web of issues that raise important questions.

Critics have long argued that the Paramount/Warner merger would lead to a concentration of power in the entertainment industry, stifling creativity and diversity. Lina Khan, who chaired the Federal Trade Commission during the Biden administration, was scathing in her assessment of the deal, calling it “facially illegal” and criticizing the proposed settlement as little more than a slap on the wrist.

The promise of “behavioral remedies” – essentially, promises from the companies to behave themselves in exchange for permission to complete the merger – is a hollow one. History has shown that such measures are often ineffective, particularly when the stakes are high. The Paramount/Warner deal represents the latest chapter in a long-standing trend of media consolidation.

In recent years, we’ve seen a steady stream of mergers and acquisitions in the entertainment industry, as companies seek to build scale and dominate the market. This has led to a decrease in choice, diversity, and opportunities for new voices to emerge. The Disney-20th Century Fox merger and the Comcast-NBCUniversal deal are just two examples of how regulators have often approved these deals with little more than a nod.

The Paramount/Warner merger is not an isolated incident but rather the latest manifestation of a broader trend towards media consolidation. It represents yet another step down the road of consolidation, where big companies get bigger and smaller ones are squeezed out. Journalism, too, is under threat from this trend.

Regulators should be fiercely independent, using their powers to protect the public interest and ensure a level playing field. However, in reality, they often find themselves caught between competing interests – those of big business on one side, and consumers and small players on the other. In the case of the Paramount/Warner merger, it’s clear that California and the other states involved were under pressure to settle.

By settling for “behavioral remedies,” regulators are essentially giving away the store. This is not a victory for anyone who cares about a free and open media landscape but rather a reminder that compromise often means surrender. As we move forward, it will be worth keeping an eye on how this merger unfolds. Will Paramount and Warner Bros. Discovery live up to their promises? Or will they continue to prioritize profits over people and creative expression?

The future of media ownership hangs in the balance, and it’s time for regulators to take a stand against consolidation and protect the public interest. Anything less would be a betrayal of their duty as guardians of our democracy.