For a moment it seemed that the economic and political clash could escalate so far that David Ellison, CEO of Paramount Skydance, might actually move the company out of California just to push through the Warner Bros. acquisition. The standstill with California district attorney Rob Bonta (a Democrat, while Ellison is aligned with Trump) was fierce, with industry insiders divided on the outcome of this colossal operation under antitrust scrutiny. An agreement was reached, the deal was unblocked, but fears for jobs have not faded.
The terms of Paramount Skydance’s acquisition of Warner Bros.
Rob Bonta in a press conference guaranteed that Paramount Skydance will not be allowed to do with Warner Bros. Discovery what Disney did with 20th Century Fox, redefined and heavily downsized after the 2019 acquisition. What are the terms, binding for five years, to which David Ellison agreed, in order to close the monstrous deal that snatched away from Netflix?
Ellison kept his word: for the two years following the acquisition, the giant must seriously deliver 30 films a year for theatrical release, increasing to 32 from the third year onward. Of these, 20% must have a budget of at least $50 million, at least 20 must be wide releases, and at least half must be co-produced or acquired from third parties, with four of these classified as “independent cinema”. Each of these works must stay in theaters for at least 45 days, and a strictly 90 days must pass before its streaming debut. If quotas are not met, the company will pay a fine of $30 million for each unreleased film, to be split among certain entities: Motion Picture & Television Fund, National Association of Attorneys General, and the funds managed by Hollywood unions. Regarding Miramax, folded into the Paramount package in 2016, its shares must be divested if it cannot be integrated into this system within the first six months.
The company will have to invest
$1,500,000,000 in five years in productions inside the United States, thereby offsetting if new tax incentives come into play. It will also have to invest $5 million per year in a fund for the purchase of independent films and a minimum of $9,500,000 per year to provide training and support for those who will be laid off after the Paramount Skydance-Warner Bros merger, whose studios, moreover, must remain separate.
Beyond cinema, more quickly: a Committee for the Independence of Information will be established to verify the journalistic integrity of CBS News and CNN (the Writers’ Guild union also secured a five-year ban on layoffs at CBS News, with a payment of $17,500,000 to the union health fund and legal expenses). The operations and contracts of Paramount’s and Warner Bros Discovery’s cable networks will have to be managed separately. Violations will force the company to cede stakes in some channels. The investment in Pluto TV should not be diminished.
All of this, in theory, is meant to limit the damage of this colossal acquisition: after the Disney-Fox deal, oligopoly in Hollywood was already a reality; now it is even heavier. For those most opposed to the operation, such as Mark Ruffalo, the complex agreement did not sit well: they had hoped until the last that California’s Democratic leadership would place a limit on a business worldview they viewed as very Trumpian.
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