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Hollywood is not just another sector of our economy. It is part of our culture, one of our greatest global competitive advantages, and a source of good-paying jobs for hundreds of thousands of Californians.
From soundstages in Los Angeles to post-production facilities, visual effects shops, small vendors, independent contractors, and family-owned businesses across the state, the film and television industry supports an ecosystem that has taken generations to build and sustain.
California’s leaders are right to take seriously their responsibility to protect and enhance this ecosystem and the workforce that depends on it.
The proposed $111 billion merger between Paramount and Warner Bros. Discovery requires a careful and careful review grounded in facts, market realities and well-established antitrust principles. Antitrust enforcement is an essential and vital tool when a merger is likely to reduce competition, raise prices, suppress wages, or limit consumer choice.
Attorney General Rob Bonta recently suggested that California sees “red flags” in the proposed deal and is evaluating whether the state should take an antitrust challenge. As a former California Attorney General, I respect this office’s commitment and authority to carefully examine these types of strategic transactions. Antitrust law is most effective when it is carefully, strictly, and consistently applied. It should not be driven by politics, competing headlines, or reflexive opposition to corporate size.
The question is not whether Paramount and Warner Bros. Discovery, two big companies, will become even bigger when they combine. They and the combined company will be. The question is whether combining them will lead to a significant reduction in market competition to the detriment of consumers and workers.
Traditional studios are no longer just competing with each other. California cannot and should not ignore this fact. Paramount and Warner Bros. are competing. Discovery works with global technology platforms and streaming giants like Netflix, Amazon, Apple and others with deep pockets, diversified revenue streams and global reach.
Even after this merger, Warner Bros. Discovery and Paramount collectively face intense competition from these tech giants as well as from Disney, Comcast/NBCUniversal, Sony, Fox and a growing world of other subscription and ad-supported digital platforms. The combination of two of the industry’s leading streaming players — HBO Max and Paramount+ — will create a stronger competitor in the global market with the ability to meaningfully invest in film and television production and distribution for decades to come.
This distinction is very important for Californians.
When studios face financial pressures, productions are postponed, moved to less expensive locations, or canceled altogether. The people who get hurt are not executives, but writers, actors, camera operators, editors, set builders, drivers, costume designers, caterers, technicians, and small businesses that rely on a strong production environment. In contrast, financially stable studios are better positioned to greenlight projects, build production lines, invest in innovative technology, and grow jobs in California.
California has already seen how fragile this ecosystem is. Production decisions have become increasingly mobile as other states and countries compete aggressively for entertainment jobs. If California wants to remain a hub for American storytelling, it must encourage companies with deep roots here to expand their businesses to invest in local production.
Critics of mergers often argue that mergers can lead to layoffs or reduced investment. These concerns truly deserve attention and diligence. But there is also a risk in allowing legacy entertainment companies to weaken further in an increasingly difficult market environment, especially in the face of entrenched, dominant competitors like Netflix. Financial instability could lead to fewer products being produced, less creative investment, and ultimately, more jobs leaving California entirely.
Some have raised broader concerns about media ownership, editorial influence or political views, as the combined company would own both CBS News and CNN. There is no doubt that this debate will continue to dominate talk shows and social media. I am also concerned about the dominance of media markets by wealthy people. But merger enforcement should remain focused on competition and the potential for harm to consumers and workers – the cornerstones of antitrust – not political disagreements over content or viewpoint.
As a prosecutor, I believed that enforcement decisions should be based on the law, evidence, and transparent standards. This principle is especially important in California, where decisions made by state officials can have national consequences and direct impacts on our workers.
Prosecutor Bonta is right to carefully review the deal. But careful review is not the same as supposed opposition.
Prosecutors have a responsibility to aggressively enforce antitrust laws when the facts warrant it. They also have a responsibility to exercise restraint when the facts are not so. Presenting weak or speculative cases may grab headlines, but may ultimately undermine the credibility of legitimate antitrust enforcement.
Based on publicly available evidence, this merger appears likely to enhance the ability of traditional studios to compete in a rapidly changing media market, in which Paramount and Warner Bros. remain major players. Discovery is smaller players than Netflix, Amazon, Apple and Disney, while giving legacy studios with roots in California greater scope to invest in production, distribution and long-term creative functions. The end result could lead to economic stability that supports countless California jobs in an industry synonymous with our state’s identity.
California has a direct interest in protecting competition, consumer choice, and the strength of its entertainment economy and workers — not to mention a rich legacy. Based on today’s market realities and currently available facts, this merger appears worthy of review, but not automatic resistance.
Antitrust enforcement serves the public best when it follows the evidence wherever it leads. So far, the evidence suggests that this deal passes this test.
Bill Lockyer served as Attorney General of California from 1999 to 2007 and previously served as President Pro Tempore of the California State Senate.
