California Gov. Gavin Newsom is quietly working to undermine his own state's antitrust lawsuit against Paramount's $110 billion acquisition of Warner Bros. Discovery, a rift that exposes the tension between Democratic legal grandstanding and the real-world jobs it threatens.
Newsom has told people involved in the matter in recent weeks that blocking the mega-merger could hurt Hollywood jobs, and his office has urged Attorney General Rob Bonta to settle the case out of court, the New York Post reported, citing a Wall Street Journal account of the governor's private concerns. Both Newsom's office and Bonta's office declined to comment.
The behind-the-scenes maneuvering puts Newsom, widely expected to seek the 2028 Democratic presidential nomination, at odds with his own attorney general, who is leading a coalition of 12 state attorneys general in a lawsuit designed to block the deal. Bonta has argued the combined Paramount-WBD company would control nearly one-third of the U.S. theatrical film distribution market and almost one-third of the nation's basic cable programming, leading to "higher prices, lower quality, and less content for film and television."
Newsom's concern centers on Los Angeles, where years of streaming growth, consolidation among film distribution giants, and intense layoffs have already battered the entertainment workforce. Blocking a deal of this size, in his view, risks compounding that damage.
It is a practical worry that cuts against the ideological posture of the lawsuit. Bonta's coalition filed its antitrust case on consumer-protection grounds, but the governor's private lobbying suggests he believes the litigation could backfire on the very workers California Democrats claim to champion.
Paramount has repeatedly defended the merger and says it originally aimed to close the deal by the end of September. The U.S. Department of Justice greenlit the acquisition, a fact Paramount has highlighted. Australia and China have also approved it, and European Union regulators issued conditional approval last week after Paramount offered concessions.
The only obstacle left standing is the lawsuit from Bonta's coalition of state attorneys general.
U.S. District Judge Araceli MartÃnez-OlguÃn, a Biden appointee, issued a temporary restraining order last week preventing Paramount from completing the deal. She is expected to rule on the timing of a trial at an August 3 hearing on the states' motion for a preliminary injunction, a court order that would keep the merger blocked while the full case plays out.
Every day of delay carries a price. If the deal is not completed before October 1, a "ticking fee" kicks in: 25 cents per share per quarter, which works out to roughly $7 million per day added to the cost of the acquisition. That clock gives Bonta enormous leverage, and gives Newsom reason to worry that a drawn-out legal fight will either kill the deal outright or make it so expensive that the combined company slashes jobs to recoup the cost.
Under the proposed deal, David Ellison, the son of Oracle billionaire and Trump ally Larry Ellison, would lead the new combined company. The merger would bring together HBO, HBO Max, CNN, CBS, and Paramount+ under one roof, creating a media conglomerate rivaling the biggest players in entertainment.
Ellison has already reshaped one newsroom. After his last media merger, he installed Bari Weiss to run CBS News. CNN anchors have reportedly grown panicked over what his leadership would mean for their editorial independence, a concern that may be animating some of the political opposition to the deal, even if the lawsuit itself is framed around market concentration.
For Bonta and the 12-state coalition, the antitrust argument is straightforward: a company controlling roughly a third of theatrical distribution and a third of basic cable programming is too dominant. But the federal government, the EU, Australia, and China all looked at the same merger and cleared it. That leaves the state attorneys general as outliers, and Newsom, privately, appears to agree they are on the wrong side of this one.
Newsom's position is awkward. He cannot publicly repudiate Bonta without alienating progressive allies who view media consolidation, especially consolidation that puts a Trump-aligned family in charge of CNN, as a threat. But he also cannot ignore the economic reality facing Los Angeles, a city that has watched its entertainment industry shed jobs for years.
So he is working the phones instead. His office urged Bonta to settle. Bonta, so far, has given no public indication he intends to back down. Both offices declined to comment on the dispute.
The August 3 hearing will determine whether Judge MartÃnez-OlguÃn fast-tracks a trial or lets the restraining order linger, pushing the deal closer to the October 1 ticking-fee deadline. If the case drags on, the cost to Paramount mounts by $7 million a day, a penalty that could reshape the terms of the deal or collapse it entirely.
When a Democratic governor has to lobby his own attorney general to stop a lawsuit because it might destroy jobs in his own state, the lawsuit was never really about protecting consumers. It was about politics, and the workers caught in the middle are the ones who will pay for it.