California may turn out to be the toughest studio boss on Paramount's planned takeover of Warner Bros. Discovery. State Attorney General Rob Bonta said California has already opened an investigation into the $110 billion deal and pledged a "vigorous" review, Reuters reports, putting Sacramento on a potential collision course with a merger that Paramount argues will generate $6 billion in savings. Those promised "synergies" are likely to mean layoffs, unit closures, and pressure on suppliers—moves that could hit Hollywood and the broader state economy, analysts note. "Paramount/Warner Bros. is not a done deal," Bonta said on Thursday, per the Hollywood Reporter.
The politics are unusual: Analysts at TD Cowen see federal approval as likely, pointing to a presidential administration friendlier to Paramount, which successfully rallied Republican opposition to a rival bid from Netflix. Instead, the main resistance is expected from Democratic Gov. Gavin Newsom and Bonta, both frequent critics of the Trump administration and vocal on antitrust and labor issues. Any state lawsuit could delay or derail the deal, potentially triggering a promised 25-cent-per-share quarterly fee Paramount must pay Warner Bros. shareholders if closing slips past October.
Bonta pointed out the importance of the entertainment industry to California's economy and said last week that it "touches the lives of Americans daily." Labor and industry voices also are weighing in. The Writers Guild of America told the US Senate that the acquisition would threaten jobs, pointing to Warner Bros.' $2 billion in post-merger content cuts after its 2022 deal with Discovery and 1,000 layoffs following Paramount's Skydance tie-up, per Reuters. Actor Mark Ruffalo urged states on Friday in a post on X to listen to Hollywood about how consolidation has affected competition, wages, and creative output.
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