Paramount is aiming to produce a total of 40 television shows by 2030, with around 30 projects currently in different levels of production, according to a recent filing tied to a consumer lawsuit seeking to block its pending $110 billion merger with Warner Bros. Discovery.
“When combined with Warner Bros.’ television studios, that output will increase to around 170 shows, and the combined firm will invest in increasing that number even further. Such increased content will also support the competitiveness of the combined firm’s streaming service and provide consumers with the benefit of increased variety and choice,” the June 3 motion to dismiss states. “In the face of this evidence of significant procompetitive benefits, Plaintiffs cannot meet their burden to clearly show a likelihood of a substantial lessening of competition.”
Paramount says the increased investment in TV content will come from the over $6 billion in planned merger synergies, which executives have said would be driven by technology integration, such as migrating the combined company to a single enterprise resource planning system and consolidating streaming technology stacks; corporate-wide efficiencies in areas such as procurement and real estate footprint; and streamlining operational efficiencies.
The disclosure of its TV production target comes as Paramount CEO David Ellison has repeatedly said that the media giant is looking to ramp up to 30 films a year with a minimum 45-day theatrical window. Other promises from Ellison include continuing to license to and buy content from third parties, preserving the home video window and continuing to allow HBO to operate independently.
The lawsuit filed by five streaming subscribers alleges that the merger would strengthen Paramount’s “ability and incentive to raise prices, reduce output, narrow slates, reduce quality and worsen consumer-facing terms, including through control of distribution, exclusivity, windowing and licensing.”
It also claims that Paramount is violating Section 7 of the Clayton Antitrust Act, which bars mergers that substantially reduce competition and the number of top companies in any given marketplace.
Paramount has asked a California court to dismiss the lawsuit, calling it a “misguided” and “clumsy” attempt to “politicize antitrust law.” A hearing for the case has been scheduled for July 16.
The Paramount-Warner Bros. deal, which has already been approved by shareholders, is on track to close by the end of the third quarter, though Paramount is internally hoping to close the merger as early as July.
Ellison met with U.S. Department of Justice officials in May to discuss the transaction. The DOJ’s Hart-Scott-Rodino review period expired in February, though the regulator can still get involved at anytime in the process. Paramount has also asked the FCC to approve its foreign investment in the deal, with those investors set to account for 49.5% of the equity of the combined company.
Additionally, Ellison met with U.K. Secretary of Culture, Media and Sport Lisa Nandy and other European regulators in January as he looks to get the Warner Bros. deal cleared by regulators. Investigations by the European Commission and U.K Competition and Markets Authority have set initial deadlines of July 7 and Aug. 7, respectively.
In addition to federal and international regulators, a group of state attorneys general are preparing to file a lawsuit to block the deal as soon as this month, two individuals familiar with the matter previously told TheWrap.
California Attorney General Rob Bonta, who is investigating the deal, previously told TheWrap that “red flags are everywhere when you have a merger of this type” and that the states are prepared to “act timely,” but declined to provide a specific timeline for when a decision could be made.
In May, Paramount said it was cooperating with various state AGs who sent them subpoenas, or civil investigative demands, focusing on the DOJ investigation and the competitive effects of the merger. At the time, it did not disclose which or how many state AGs sent subpoenas.
“Opposing this deal means opposing expanded consumer choice, new opportunities for creators and workers, and greater competition throughout the creative ecosystem—the opposite of what antitrust law is meant to achieve. It also means giving entrenched incumbents like Netflix an advantage they do not deserve,” a Paramount spokesperson told TheWrap on Friday. “We will continue to fight against any attempt to derail a deal that plainly benefits consumers, creators, and the industry as a whole.”
In the event the transaction does not close by Sept. 30, WBD shareholders will receive a 25 cent per share “ticking fee” for each quarter until closing. In the event that the deal does not close at all due to regulatory matters, Paramount will pay WBD a $7 billion termination fee.
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