Paramount still plans on closing its $110 billion merger with Warner Bros. Discovery this quarter, even though a dozen states have filed for a temporary restraining order against them as well as a lawsuit as a matter of antitrust.
“They are seeking a TRO, but we had indicated to them that the intention of the company is to be able to close, starting on July 22, when we expect to have all the clearances, or we can work out a schedule to get this all decided by early September,” Paramount’s lead outside counsel Jeffrey Kessler told David Faber Tuesday on CNBC. “That would be perfectly acceptable to the company, if that would create an orderly procedure. The states rejected both alternatives.”
“If they got a TRO, it would last 14 days. The most it could last is another 14 days, and then we’d have to go to what’s called the preliminary injunction anyway. We do not expect them to be able to get a preliminary injunction,” he added. “This is an antitrust case. To stop a merger, the merger has to be anti-competitive. This merger is pro-competitive.”
The lawyer’s commentary came a day after 12 state attorneys general from California, Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington filed a lawsuit over the “unlawful” merger due to fears of consolidation.
“Anybody who knows the entertainment industry knows it is in deep trouble. Linear television is in deep trouble because of streaming and because of cord-cutting. Theatrical is in deep trouble because of the advent of streaming and what it has done,” Kessler continued. “This merger is designed to make a stronger linear television company, to make a stronger theatrical producer and to create a true competitor in streaming that can go toe-to-toe with a Netflix or a Disney or a Prime. So that’s something that consumers should want, labor should want, theaters should want.”
The co-executive of Winston Taylor also reiterated the merged company’s intention to release 30 theatrical films a year, in addition to the 45-day window, further saying they told the states they could enforce these commitments.
“I believe in competition, because I think competition benefits consumers, competition, stakeholders. That’s the whole philosophy of the antitrust laws,” he explained. “I have great respect for the states as enforcers, but I also will defend cases where I think the antitrust claims are misguided and that you’re actually looking to use the antitrust laws to interfere with something that is going to be pro-competitive. So it was an easy call for me to take this one for Paramount, because I believe it’s the best thing for the industry.”
“Just to make it clear: If there is going to be more pictures, that is more jobs for actors, more jobs for writers, more jobs for directors; it’s not fewer jobs, because content is going to go up as a result of this merger,” Kessler further noted. “We’re not going to close before July 22, and the plan is still to close this quarter before the end of September. That is the goal. I think we’ll either do it because they won’t get a preliminary injunction or because we’ll meet a happy agreement with them. One way or the other.”
However, he also said they’d appeal if the states do get their preliminary injunction: “Absolutely. The company believes strongly in this and they would take this up to the Supreme Court if they have to.”
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