Paramount CEO David Ellison met with Department of Justice officials on Tuesday as he looks to get his pending $110 billion merger with Warner Bros. Discovery over the finish line with antitrust regulators.
During the two-hour meeting, Ellison reiterated the company’s commitment to release up to 30 movies in theaters, according to Semafor. The outlet added that the DOJ’s staff attorneys appeared to be swayed by arguments from the media giant’s executives that the deal wouldn’t hurt other studios or creative talent.
Disney’s 2019 acquisition of Fox’s entertainment assets was also discussed during the meeting, an instance of a major Hollywood merger that led to fewer films being released in theaters and instead being released on Disney’s streaming platforms. The global shutdown due to the COVID pandemic also contributed to Disney’s streaming-focused movie approach, a point that Ellison and Paramount leaders made to the DOJ.
Representatives for WBD and the DOJ declined to comment. A Paramount spokesperson did not immediately return TheWrap’s request for comment.
The DOJ meeting comes after the agency’s Hart-Scott-Rodino review period expired in February, though the regulator can still get involved at anytime in the process.
Regulators in the U.K. are gearing up to begin their review of the deal, with its deadline for public comments closing just last month. 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.
In addition to federal and international regulators, a group of U.S. state attorneys general led by California’s Rob Bonta are also reviewing the deal and weighing whether to take legal action against the merger. Bonta 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 a recent regulatory filing, Paramount disclosed that it has received subpoenas, or civil investigative demands, from various state AGs that focus on the investigation by the Department of Justice and the competitive effects of the merger. It does not disclose which or how many state AGs sent subpoenas.
“We have been cooperating with the state attorneys general in responding to their requests,” Paramount said at the time.
The 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.
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.
Shares of Paramount closed at $10.62 apiece on Wednesday. The stock is down 33% in the past six months, 19% year to date and 9.5% in the past year.
