When the Justice Department’s antitrust division announced last week that Paramount Skydance could proceed with its $111 billion bid to acquire rival Warner Bros. Discovery, federal regulators made a bold claim about the future of television.
The deal could give billionaire David Ellison — an ally of President Donald Trump — a striking degree of control over the news programming Americans watch on television through CBS News and CNN. Ellison would also own two Hollywood movie studios and two streaming platforms.
Despite the megaconsolidation, federal regulators concluded the deal would benefit the industry and consumers through increased competition “across the media and entertainment ecosystem.”
Antitrust experts, meanwhile, say the game was rigged, and some critics have said the merger would create a monopoly. Senior Justice Department leaders greenlit the deal before career antitrust lawyers had an opportunity to object, The Wall Street Journal reported Monday.
Matt Stoller, the research director at the American Economic Liberties Project, told Straight Arrow the Justice Department’s posture is unprecedented and was likely designed to hinder forthcoming state lawsuits challenging the merger.
“In the case of the Trump administration, it’s a pay-to-play operation and it’s just super corrupt,” said Stoller, a former Senate committee staffer for Sen. Bernie Sanders, D-Vt., and author of a book tracing the decline of vigorous federal antitrust enforcement.
The result, Stoller said, is a deal that could place an unprecedented share of the entertainment and media industry into the hands of a Trump ally. “These guys are criminals,” he said. “That’s what happens. They’re gangsters.”
Paramount, Warner Bros. and the Justice Department didn’t respond to requests for comment. Neither did the White House nor the Justice Department. A White House spokesperson referred Straight Arrow to the Justice Department.
Why did the DOJ approve the deal?
When the Justice Department announced late Friday its approval of Paramount Skydance’s proposed acquisition of Warner Bros. Discovery, it said the decision followed a painstaking, eight-month investigation.
Should the deal go through, Ellison would oversee the film studios Paramount and Warner Bros, the streaming services Paramount+ and HBO Max and the TV news outlets CBS News and CNN.
Ultimately, the department concluded the merger is “not likely to result in harm to competition or American consumers,” and, in fact, could “increase competition across the media and entertainment ecosystem, with benefits for American consumers and workers.”
The deal could give Paramount a stronger position in streaming video, in particular, as the company tries to compete with digital-native players Netflix and Amazon.
The department also cited a “robust competitive landscape for live programming” on television and “extensive competition” in Hollywood as factors in its conclusion.
The Justice Department’s antitrust division has a mandate to investigate and litigate proposed mergers that stifle competition and harm American consumers. The Journal reported Monday that senior leadership approved the merger before staff antitrust investigators finalized their review. In fact, The Journal reported, the team scrutinizing the proposal was weighing a lawsuit on accusations that the merger would be anticompetitive and violate federal antitrust rules.
Stoller said it was highly unusual for the Justice Department to issue a press release announcing its decision to greenlight the deal. The government approved the deal without any concessions.
“All they did was they put out a document saying, ‘We approve the merger and here are all the reasons we think the merger is good,’ and that’s pretty much unprecedented — the DOJ’s never done that as far as I can tell,” he said. “If the states take it to court, Paramount wants to be able to go to the judge and say, “See, look, the antitrust division thinks it’s a good merger, so, you know, you should think so, too.”
Stoller said the merger falls shy of creating a true monopoly, where a single company becomes the sole provider of a good or service. Other movie studios will still exist, as will other streaming platforms and television news sources. What it does create, he told Straight Arrow, is “an oligopoly,” where a small number of companies dominate an industry. The setup likely violates federal antitrust law, he said.
“It’s not a monopoly, but the law says that if you substantially reduce competition, the merger is illegal,” Stoller said.
The outcome that consumers should expect, he said, includes higher prices for streaming services, lower wages for entertainment industry workers and weakened bargaining terms for independent TV production companies.
Is politics a factor in the Paramount-Warner Bros. Merger?
Proponents of the merger, as well as critics, have pointed to a rightward turn at CBS News under Ellison-appointed top editor Bari Weiss as a potential future for CNN. Most recently, Weiss oversaw a shakeup at the newsmagazine “60 Minutes,” including high-profile firings and the appointment of an executive producer without previous broadcast news experience.
Among the leading proponents of the merger is Defense Secretary Pete Hegseth, a former co-host of “Fox & Friends Weekend.” In March, Hegseth endorsed Ellison’s CNN takeover and suggested the acquisition could influence the channel’s news coverage.
“The sooner David Ellison takes over that network, the better,” Hegseth said during a Pentagon briefing in March.
CNN employees are already worried about what the shakeup could mean for their careers and the direction of the company, said journalist Frank Sesno, a professor of media and public affairs at George Washington University and a former Washington bureau chief for CNN.
“Every time there’s a corporate handover like this or there’s a merger like this, it creates uncertainty in the ranks,” Sesno told Straight Arrow. Typically, he said, media mergers lead to budget cuts, leadership changes and layoffs.
“And then, of course, this time you have the very significant added dimension of politics,” Sesno said. “So it’s a very challenging time.”
Paramount Skydance executives, meanwhile, have floated the idea that antisemitism is driving opposition to the merger and to Ellison in particular, Axios reported Tuesday. When Ellison hired Weiss last year to lead CBS News — and perhaps CNN soon — he was reportedly struck by her “unwavering support of Israel and preoccupation with the rise of antisemitism.” Ellison has reportedly collaborated with the former Israeli military intelligence chief Benjamin Gantz to undermine critics of Israel’s military activities.
Makan Delrahim, Paramount’s chief legal officer and former head of the DOJ’s antitrust division during Trump’s first term, said opposition boils down to “fear-mongering.”
“They are running a political campaign,” Delrahim recently told the Los Angeles Times. “Some of these people are trying to inflict harm on this transaction really because of their own antisemitic views. Regulators and law enforcement officials will see right through that.”
The company has made it past the federal government, but state attorneys general and European regulators are preparing their own legal challenges. A coalition of state attorneys general, including those from California, New York and Tennessee, could sue in the coming weeks.
While the Justice Department’s antitrust division has traditionally taken the lead on such cases, Stoller said, states and private citizens should take the lead when the federal government fails to uphold the law.
“They should challenge the merger,” Stoller said. “The merger is really bad.”
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