The Los Angeles County Board of Supervisors on Tuesday formally supported California’s lawsuit seeking to block Paramount Skydance Corp.’s proposed takeover of Warner Bros. Discovery Inc.
The board’s action follows a court-ordered temporary halt to the $110 billion proposed megamerger of two of the entertainment industry’s largest conglomerates.
“The Board is laser focused on the importance of the entertainment industry on our local economy,” Supervisor Kathryn Barger said at the board meeting Tuesday. “I’ve heard from constituents and residents who’ve spoken at our board meetings, concerned over job loss and the movement of industry jobs to other states and countries.”
The District 5 supervisor said the film and television industry is a key pillar of the county’s economy with over 171,000 jobs and a broader creative workforce totaling more than 300,000 workers.
“Hollywood is more than a place; It is an industry of writers, actors, technicians, creators, caterers, dry cleaners, and family-owned businesses whose livelihoods depend on a thriving entertainment economy,” said Supervisor Lindsey Horvath said in a statement. “LA County has a responsibility to fight for them, defend competition, and ensure the next chapter of Hollywood is written by the people who built it, protecting and strengthening our creative economy and cultural capital for years to come.”
The motion calls for the county to support the lawsuit filed last week in Northern California via legal support or filing an amicus brief.
The board also OK’d Barger’s amendment to the motion that directed county attorneys to provide a written report in 60 days that analyzes “all other legal options for the County to pursue to protect and preserve the television and film industry, including jobs, in Los Angeles County from the impacts of the prospective merger.”
During the meeting Horvath said, “The future of Los Angeles County’s entertainment industry and the livelihoods of the people who make it possible are at stake,” Horvath said during the meeting.
“Today we are sending a clear message — Los Angeles County stands with our workers, our creatives, our small businesses and every family whose future depends on this important industry,” the District 3 supervisor added.
Earlier this year the county Department of Economic Opportunity reported to the board on possible impacts of Paramount’s takeover bid. The DEO estimated the merger could result in nearly 2,500 job losses in the county and roughly 6,000 positions globally.
The jobs most at risk are in corporate, tech, real estate and other shared functions because of duplicative roles in the two companies, according to the report. DEO analysts noted that the job-loss estimates are not a layoff forecast, but a report on the scale of possible employment impacts that may be subject to consolidation if a merger comes to fruition.
On Monday, U.S. District Judge Araceli Martinez-Olguin issued a temporary restraining order that put a two-week hold on the proposed takeover while the court considers whether to issue a preliminary injunction blocking the deal during the full course of the lawsuit. The judge set an Aug. 3 hearing.
California Attorney General Rob Bonta, who is leading a multistate coalition in the antitrust lawsuit, applauded the ruling as “a critical first win in our case to ensure this megamerger never sees the light of day.”
According to Bonta’s announcement of the lawsuit last week, the merger — which the U.S. Department of Justice and a number of other national governments have already OK’d — would lead to higher prices for consumers and less available entertainment content.
Bonta said the $110 billion merger, considered one of the biggest media deals of all time, would place one corporation in control of nearly one-third of all theatrical motion picture and basic-cable programming.
Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington have joined Bonta’s lawsuit.
The court heard arguments Friday before Martinez-Olguin declined to immediately rule on the states’ request for a temporary restraining order.
A statement from Paramount last week said the suit “reflects a fundamentally flawed application of the antitrust laws and is wrong on both the facts and the law.”
Company officials said they “will vigorously defend the transaction and demonstrate that this challenge is inconsistent with sound competition policy and the competitive realities of the media marketplace. Delaying this transaction will only harm entertainment workers who have already suffered over recent years as technology has disrupted their livelihood and cost California tens of thousands of entertainment jobs,” Paramount’s statement continued.
“The combination of Paramount and WBD will create a stronger, well- capitalized, creative-first media company that is better positioned to compete with companies like Netflix that have come to dominate the industry for audiences, premium content, and creative talent,” according to the company. “Put simply, any attempt to block this transaction undermines the very principles antitrust law is designed to promote: more competition, more choice for consumers, and more opportunities for creators and workers.”
Paramount’s takeover bid would combine Paramount Pictures and Warner Bros., studios with histories spanning over 100 years. The merged corporation would also include the Paramount+ and HBO Max streaming services, the CBS broadcast network and cable channels such as CNN.
Paramount Skydance CEO David Ellison has said the merger would honor the legacy of both companies while creating a “next-generation media and entertainment company.”
Ellison is the son of billionaire Oracle co-founder Larry Ellison.
The deal has faced opposition from some entertainment industry professionals and elected officials who argue it would further consolidate ownership in the media industry.
Over 1,000 entertainment professionals signed an open letter in April opposing the proposed megamerger, contending the deal would reduce competition in an already heavily concentrated industry.
