The Wild Card in Trump’s Attempt to Control the News
The attempted censorship of Stephen Colbert’s late-night interview with Texas’s U.S. Senate candidate James Talarico backfired so completely, with millions watching the interview on YouTube, that it may have made Talarico more likely to win his Democratic primary against Rep. Jasmine Crockett. Yet regardless of how you feel about the electoral outcome, the episode is another example of David Ellison and the new ownership at Paramount, parent company of CBS, signaling its intention to use one of the nation’s major broadcast networks as a tool for the Trump regime, with only sanctioned content going out over the airwaves.
That’s always been the fear associated with Paramount’s numerous attempts to purchase Warner Bros. Discovery (WBD), parent company of CNN. If that ever went through, the majority of the nation’s main cable news networks would be in the hands of conservative partisans. While I’m not sure cable TV—including cable news—will even be around in a few years, partisan control of the communications infrastructure is what authoritarian regimes do to manage their populations. Regardless of the chances of success, this is the clear intent: to MAGA-ify the news.
The Talarico backlash suggests that, in an era of splintering television audiences, multiple distribution channels, and diminishing trust in traditional media, the Trump-Ellison gambit might not work. Similarly, what looks like growing attempts at the federal level to stage-manage a WBD sale to Paramount also have a fatal flaw, tied to the decentralized nature of antitrust enforcement. Simply put, state attorneys general can and likely will sue to block any attempted Paramount-WBD merger, no matter how Trumpworld plots to get it done.
Those who believe that Paramount’s acquisition is inevitable got new fuel this week, when Warner Bros. reopened deal talks, despite agreeing to a $72 billion offer to sell itself to Netflix. Paramount initially offered $30/share to buy all of WBD, including its cable channels like CNN, TNT, and TBS. (Netflix is only seeking the Warner Bros. studio, pay-TV stalwart HBO, and its streaming entity HBO Max.) But Paramount hinted it would increase its bid to at least $31/share if talks resumed, and also promised to pay the $2.8 billion termination fee due to Netflix if WBD backs away from its deal with the streaming giant.
Regardless of the chances of success, this is the clear intent: to MAGA-ify the news.
Netflix can match any WBD offer from another bidder under the terms of its agreement, but the deal allows a seven-day window where WBD can negotiate with other suitors. Netflix stipulated to that waiver so WBD could talk to Paramount.
Paramount still isn’t entirely happy with this, and asked for an unlimited right to negotiate rather than a weeklong timeline, which would end on February 23. The company is pursuing a hostile takeover of WBD, and plans to submit a competing slate of directors at the WBD annual meeting. For its part, the Warner Bros. board has said that Paramount’s $31/share offer must be increased to win its support, providing “superior value and certainty for WBD shareholders.” Currently, the board continues to support Netflix’s bid, and there’s a March 20 date set for a shareholder vote on that deal.
So while this is a glimmer of hope for Paramount, it’s really only a glimmer. WBD had no real reason to reopen talks, but the board doesn’t yet sound convinced that the talks will be fruitful, particularly because Paramount would have to take on a lot of risky debt to hit the numbers WBD wants.
But while the bidding war continues, Jonathan Alter of Washington Monthly reports that the Justice Department is about to go public with its intent to block the proposed Netflix-Warner Bros. merger. Earlier, The Wall Street Journal said that the DOJ was “casting a wide net” in its merger review, looking into potential monopolistic business practices by Netflix. Alter’s claim contradicts Trump’s own words that he would “stay out” of the merger review on this deal, but Trump’s not exactly the most reliable narrator of his own actions.
As Alter says, the Netflix-Warner Bros. merger does deserve close scrutiny. It would shrink the number of studios in Hollywood and damage producers, actors, and other entertainment talent; it would combine the number one and number four streaming outlets globally, which invites jacking up subscription prices; it would consolidate film libraries in Netflix’s hands to put competitors at an extreme disadvantage; it would potentially collapse theatrical windows and film output to the point of threatening the operation of movie theaters and transforming the moviegoing experience. It has the earmarks of a disaster for the U.S. entertainment industry.
Members of Congress have gone hard against this proposal as well. A Senate subcommittee hearing on the deal earlier this month drew bipartisan opposition, with subcommittee chair Sen. Mike Lee (R-UT) warning against “one platform to rule them all” and ranking member Sen. Cory Booker (D-NJ) saying that “the sale of Warner Bros. to any competitor could have serious consequences for consumers and for the television and film industry.”
But Alter claims that after blocking Netflix, the fallback option would be Warner Bros. running into the waiting arms of Paramount, giving a Trump ally control of HBO and CNN. “You would have a situation where CBS, CNN, and Fox, not to mention TikTok, would all be under the control of Donald Trump,” he writes.
As a potential way to stop this outcome, Alter proposes the public comment period on a hypothetical Paramount-WBD merger as a way for voices to get heard by a judge. But there’s a missing ingredient here: Why would a judge have the ability to hear a merger challenge if the Justice Department, under orders from Trump, would simply wave Paramount’s acquisition through? After all, for a judge to be involved, some entity would have to bring a case.
Fortunately, that someone exists, and it’s not Pam Bondi or whatever lackey is running the Antitrust Division. State attorneys general have the authority to use the federal Sherman and Clayton Antitrust Acts to block mergers or to bring monopolization cases. While Gail Slater’s ouster at the Antitrust Division greases the skids for DOJ to drop its monopolization case against Live Nation-Ticketmaster, for example, 40 states were co-plaintiffs on that case, and at least some of them are very likely to continue the litigation, which has a March 2 trial date. Similarly, state AGs can bring a merger challenge against Paramount-Warner Bros. And in fact, some are already looking at it.
At the investigative site The Capitol Forum, Montana Attorney General Austin Knudsen (R) wrote a powerful op-ed detailing his problems with a Netflix-Warner Bros. merger. “This massive consolidation would place an unprecedented amount of content, distribution power, and market influence into the hands of a single corporation,” Knudsen wrote. “Hollywood’s golden eras were built on rivalry, studios pushing each other to be better, filmmakers finding multiple avenues to bring their visions to life, and audiences benefiting from an abundance of choice. Consolidation stifles that spirit. It replaces competition with control and creativity with corporate strategy.”
That is no less true if Paramount is the acquirer.
States offer a powerful bulwark to the potential plans of Trump and his allies to control U.S. media.
Knudsen is a Republican who would surely face Trumpian pressure in the case of a Paramount-WBD merger. But plenty of Democratic AGs would have the ability to sue to block the combination. Letitia James in New York and Rob Bonta in California represent our two entertainment capitals in the country, and neither would be swayed by Trump if they wanted to sue. Some advocates are already pushing them to announce that they would resist any Warner Bros. merger, though media workers and their unions could certainly push harder on that.
The point is, states offer a powerful bulwark to the potential plans of Trump and his allies to control U.S. media. Several public officials stand in the way, which is appropriate, since creeping monopolization in Hollywood represents a serious threat to one of America’s few remaining industries that produces something tangible.
Yes, the decision would be left in the hands of courts, which at the highest level is tilted to the right. But state AGs could steer the initial case to favorable jurisdictions and draw out the process for years. We saw many proposed mergers blocked in the Biden years that led to the merging parties abandoning the effort, rather than waiting for the Supreme Court to maybe get involved.
There is one tactic that Paramount and its chief adviser on the merger, former Trump antitrust enforcer Makan Delrahim, are using to try to get the deal through before state AGs can react. According to Matt Stoller, Delrahim had Paramount file most of the paperwork for a merger with Warner Bros. before the two companies have even agreed to any terms. That could give state enforcers as little as 15 days to challenge the merger once it is announced. States often rely on the federal government to comb through the paperwork, but in this case the feds can be relied upon to offer no resistance.
A quick-strike merger would allow Paramount and WBD to quickly combine assets and make any subsequent untangling difficult. But that is all the more reason for Democratic AGs to make their intentions known now, and for the best and brightest in Hollywood to urgently press the issue. There are options to prevent a kind of Viktor Orban-style shift into effectively state-run media that doesn’t question authoritarian power. And the sooner that state AGs announce their determination to use those options, the better the likelihood of success.
The post The Wild Card in Trump’s Attempt to Control the News appeared first on The American Prospect.