Paramount Politics: In Tough Year For Incumbents, $111B WBD Merger Has State AGs Concerned With More Than Antitrust…

EXCLUSIVE: In a tough and rough election year for incumbents, Paramount’s $111 billion acquisition of Warner Bros Discovery has become a political football in California and across the nation.

Just a few feet from Donald Trump, a smiling David Ellison was front and center last night for the UFC’s controversial and inflammatory Freedom250 cage matches on the White House lawn. Still, even with the Justice Department approving the WBD merger late last week without any concessions, the Paramount Skydance’s CEO’s happy face masked some spikey obstacles to the merger from overseas and in state houses over Ellison’s strategic bear hug with the ex-Apprentice host.

“The Ellisons’ haste to get their deal done by Trump has a lot of enemies,” an individual close to power players in Sacramento told Deadline after the June 12 sign-off by the federal DOJ. “They may think they’re home free, but that’s wishful thinking and not political reality.”

Led by California’s reelection-seeking Rob Bonta, nearly a dozen state attorneys general are poised to launch a lawsuit in the next few weeks to derail the ParaBros deal or at least take a bite out of it, Deadline can confirm. However, for all the antitrust threats opponents to the merger have floated, the mainly unspoken but real battle in this year of midterm elections seems to be about old-fashioned politics and firing up the base.

Having told Deadline ages ago that his office was pondering an antitrust action over the WBD meld, AG Bonta threw cold water on the Trump DOJ’s signoff last week with a curt “the merger of Warner Bros and Paramount is not a done deal and remains under investigation by my office” tweet.

At the same time, the Ellisons have retained Jeffrey Kessler to get in the legal octagon for them if the state throws down.

Having fought alongside Bonta, New York AG Letitia James and others recently in successfully pinning Live Nation in the antitrust suit the Trump administration had walked away from, Kessler is an inspired choice by Paramount on many levels. Kessler won’t tip his hand to the electoral backroom moves at play, but the Winston & Strawn litigator is very skeptical the states have an antitrust suit when it comes to ParaBros.

“I have great respect for the states,” Kessler told Deadline in true diplomatic fashion. From the lawyer’s POV there will be no “reduction in competition” in Hollywood if the two companies become one.  “I think they’re very talented lawyers there, and I think they do a lot of wonderful things for the public good. I will not criticize the states in any way, shape or form.”

With the precision of a closing argument, he adds: “What I would say is what I would hope they are doing, and I believe they are doing is seeing if they actually have an antitrust case to bring that has a reasonable chance for success. My hope is that they keep an open mind, that they don’t make a decision based on politics on an antitrust case, and that they only file an action if they really think that they can prove an antitrust violation. That process takes a long time, so it doesn’t surprise me that they haven’t filed anything yet.”

Certainly, besides the midterms in November, there are some other real time calendars issues coming up fast for Paramount.

As a multi-phased review by UK regulators may have thrown their own spanner in Para-WBD works last week, there is some serious money on the table for Ellison and his Oracle founder father if the merger isn’t locked in by September 30. At that point, a ticking fee kicks in and Paramount would be paying hundreds of millions out to WBD shareholders every subsequent month.

For a merger already weighed down by debt and foreign interest concerns, that real money is a big deal.

Adhering the illusion of still being on the fence over the ParaBros merger even as they are sitting down with potential outside counsel and have received a newly flush antitrust-fighting war chest from Gov. Gavin Newsom, Bonta’s team will only say they are “taking a very close look and intend to be vigorous in our review of the proposed Paramount and Warner Bros merger.”

In a vigorous(ish) AG race against Republican Michael Gates this year, Bonta has been showing up almost everywhere, including a very partisan IATSE attended mock hearing in Burbank by Sen. Adam Schiff in March, pounding the Ellisons, to be seen in the warm glow of anti-merger activists and layoff fearing Hollywood workers.

“Our office will take necessary action if we find that the transaction is unlawful under antitrust law,” a circumspect spokesperson for the Golden State AG told Deadline this week as anticipation of their expect action has only grown in the last week. “The opposite is also true: we will give it a fair review on the merits, and if it looks good for California consumers, there won’t be further action. California DOJ has been doing this work for a long time: our office has intervened in mergers in the grocery, broadcast market, and healthcare industries and has no qualms about stepping in and stopping deals we find illegal — and stepping back if those deals pass regulatory scrutiny.”

“Beyond this, the Paramount acquisition of Warner Brothers remains an active investigation, and we do not have any updates to share at this time.”

On the other side of the country, NY AG James faces far lesser GOP rivals as the Trump foe heads into her own primary later this month. To that, James has played less of a role publicly in any Paramount-WBD legal action, while being a “big player” behind the scenes, I’m told. In that context, a spokesperson from the New York Attorney General’s office confirmed New York was part of the coalition of states lining up in opposition to the big bucks and seemingly fast-tracked merger but declined to discuss any potential lawsuit.

“Paramount is going to have to give something up, maybe control of CNN, if they want this deal to happen,” a well-placed political operative asserts. “They could have handled it differently from the start and maybe, maybe, have gotten buy-in from Democrats, They went full MAGA and there too many objections, too many minefields now.”

With big names like Mark Ruffalo, Jane Fonda and others taking to podiums and Zoom calls to invoke the First Amendment and decry the Ellisons’ links to MAGA (with the future of CNN eating up a lot of the spotlight after the ongoing chaos at the Bari Weiss-led CBS News), a follow-the-money game separate from the state AGs has emerged. As over 5,000 Tinseltowners signed an open letter praising Bonta and other mainly Blue State AGs for “scrutinizing the merger and considering legal action to block it,” the Block the Merger movement has been swatted with allegations it’s all being masterminded by MAGA boogieman George Soros and a cadre of socialist billionaires and antisemites.

Closer to home in the Democrats civil war that is the L.A. mayoral race between vulnerable incumbent Karen Bass and her ex-ally Councilmember Nithya Raman, the takeover of the David Zaslav-run WBD by Paramount has become a major campaign issue In a city pummeled by a massive decline in production, the loss of over 40,000 industry jobs the past couple of years and worries over deep cuts once ParaBros occurs.

Personally connected to Hollywood through her producer/writer spouse, Raman was blunt about where she sees this all going.

“This merger is bad for Los Angeles, and its math only works through mass layoffs,” the two-term Hollywood heavy District 4 councilor says. “When Skydance bought Paramount, over 2,000 people lost their jobs, many of them in Los Angeles,” she adds. “This is what consolidation looks like on the ground. Billionaires will benefit, while the workers who built this industry get left behind. I’m grateful the attorneys general are acting to block it, and as mayor I’ll make sure Los Angeles does everything in its power to support their case.”

Bass, who has lashed out at Raman over inaction for Hollywood even before her political pal beat Hills alum Spencer Pratt to secure a second spot in the fall runoff, was more measured, kinda.

“The entertainment industry is at the core of who we are as a city, LA’s place on the global stage, and to our entire economy,” the ex-Congresswoman told Deadline. “I cannot support a deal that results in massive job losses,” Bass, who has family members of her own working in the industry, went on to say.

“I urge regulators to enforce job protections and creative freedom, and I call on Paramount’s leadership to redouble its commitment to the industry workers in our city.”

That’s a helluva lotta trust.