Reuters-Yonhap News
Warner Bros. Studios. Reuters-Yonhap News
Oracle founder Larry Ellison. Photo=AFP-Yonhap News
The merger between Paramount Skydance and Warner Bros. has run into opposition from US state governments. The states are concerned that combining the two media giants could create a mega-corporation that harms market competition. They are also examining whether any improper lobbying took place as the buyer of Warner Bros. shifted from Netflix to Paramount. California and New York are also preparing lawsuits.
“They Think They Are Above the Law”… Oregon Signals Full Legal Battle
According to Reuters on the 12th, the Oregon Attorney General’s Office said it had withdrawn its request to delay the Paramount Skydance-Warner Bros. merger. The move came after Paramount refused to disclose information requested by the government, which the office judged to be a stalling tactic, and it is now preparing to take another legal action. The Oregon Department of Justice criticized Paramount to Reuters, saying, “Paramount has made clear that it will not comply with the authorities’ investigative demands, and it appears to think it is above the law,” adding, “We will not allow the precious assets of Oregon residents to be wasted on their stalling game.” The department also signaled future measures, saying it had “canceled the deal delay request for now in order to review its next response.”
Earlier, Oregon had ordered Paramount to submit records related to the Warner Bros. deal to the court, and had requested that the merger approval be delayed for 60 days so that state authorities could review them. Paramount also agreed not to close the merger before the 22nd to allow the authorities’ review, but it appears to have refused to disclose information. The documents Oregon authorities are currently seeking are records related to a project Paramount internally pursued to gain regulatory approval, dubbed “Project Warrior.” The state is also demanding records related to lobbying activities Paramount conducted with the Trump administration to win support for the M&A. In response, a Paramount spokesperson said, “We welcome the Oregon Attorney General’s decision to cancel the request to delay this merger deal,” emphasizing that “this M&A is lawful and promotes market competition.”
“Son of Trump’s Close Friend” Company… Paramount Faces String of Lawsuits
The US Justice Department already approved the merger on the 12th of last month, and issued an unusual statement saying the merger would have a positive effect on competition in the streaming market. David Ellison, CEO of Paramount, is the son of Oracle founder Larry Ellison, a longtime friend of President Donald Trump. For this reason, some have argued that the Trump administration did not strictly scrutinize whether Paramount violated antitrust law.
Oracle Chairman Larry Ellison was confirmed to have donated about $45 million (about 70 billion won) to a nonprofit organization supporting President Donald Trump’s 2024 election campaign. The Wall Street Journal (WSJ) reported that Ellison used this to build a personal relationship with Trump, gaining an advantageous position in his own business and his son’s media business. Immediately after Ellison’s donation, Oracle reaped a series of benefits. On January 21 last year, the day after Trump’s inauguration, Oracle was selected as a key infrastructure provider for the $500 billion (about 774 trillion won) “Stargate Project,” an artificial intelligence (AI) data center construction project. The same year, Oracle joined an investor group that acquired TikTok’s US operations in a deal brokered by the US government.
Despite such criticism and concerns, after the federal government swiftly approved the merger, several states besides Oregon, including California and New York, are reportedly preparing lawsuits over the acquisition. Reuters, citing sources, reported that related lawsuits could be filed as early as next week. If a court orders the acquisition process to be halted during the litigation, the deal could be delayed by several months. In that case, Paramount could take on $80 billion in debt, the news agency reported.