The Block the Merger coalition has filed an emergency motion in California federal court on Thursday, asking Judge Araceli Martínez-Olguín for an opportunity to formally oppose a “weak and unenforceable” settlement between Paramount and 12 state attorneys general.
The agreement, which the parties agreed to on Monday to resolve the latter’s antitrust lawsuit seeking to block the former’s $110 billion merger with Warner Bros. Discovery, includes commitments to release at least 30 films a year in theaters, negotiate the distribution agreements for each company’s suite of cable networks separately, set up an independent editorial board to oversee the CNN and CBS News operations and continue to operate each company’s studio lots for five years.
Failure to comply with the various commitments in the settlement range from a $30 million penalty per film that misses the theatrical goal to forced divestitures of the company’s 49% Miramax stake within a 12-month period as well as BET, Comedy Central, VH1, Smithsonian, Destination America and Science Channel within a 120-day period.
“We believe the consent decree fails to meaningfully address or mitigate the harms that will be caused by this monopoly merger to the entertainment industry, diverse storytelling, independent filmmaking, consumer interests, a free press, First Amendment rights, and fundamentally, democracy,” Mara Verheyden-Hilliard, Steering Committee for the Committee for the First Amendment and First Amendment litigator, said in a statement. “It does not serve to benefit anyone except the owner family of Paramount and those holding political power who will use this corporate consolidation as a proxy force for First Amendment suppression of disfavored expression and viewpoints.”
The filing comes as Martínez-Olguín set a hearing for Thursday at 11 am PT to address “certain outstanding questions regarding the factual and legal underpinnings” of the proposed settlement, as well as its implementation.
The Block the Merger coalition noted that the judge may rule on their motion during that hearing as well. The group has proposed a briefing schedule through Oct. 13, which would put Paramount on the hook for a $7 million per day ticking fee starting Oct. 1.
“Hundreds of thousands of people across the country called on state attorneys general to enforce the law and to protect consumers, workers and free speech,” Free Press Co-CEO Jessica J. González, who serves as co-counsel on the motion, said. “The weak and unenforceable deal the AGs struck with Paramount leaves us in the lurch. We deserve our day in court.”
In addition to The Committee for the First Amendment and Free Press, other groups participating in the motion include the Freedom of the Press Foundation, Future Film Coalition and International Documentary Association. The League of United Latin American Citizens (LULAC) have also filed a separate legal motion to address concerns with the consent decree.
In a separate filing, Paramount knocked the requests as “improper” and warned it would force them to “incur tens (if not hundreds) of millions of dollars of payments while adding nothing to the record.”
“Their proposed submissions do not offer the Court information or perspective that the existing record does not already supply,” the media giant added.
The settlement with the state AGs comes after Paramount already received clearance from Warner Bros. shareholders and regulators and governments representing 68 jurisdictions, including the U.S. Department of Justice and Federal Communications Commission, the European Commission and the United Kingdom’s Competition and Markets Authority.
In addition to the concessions in the U.S., Paramount agreed to concessions in the U.K. and Europe, including terminating its stake in United International Pictures a commitment not to combine linear channels with its streaming services and maintain the editorial independence of its news services and children’s networks and to provide more funding to Channel 5 to support high-quality news, original children’s programming and drama.
It also reached a separate resolution with the WGA, including a five-year layoff pause at CBS and a $17.5 million health fund contribution.
