US Sends Subpoenas in Warner-Paramount Antitrust Review as Probe Intensifies

Paramount Skydance Acquisition of Warner Bros Discovery Under DOJ Investigation

The U.S. Department of Justice (DOJ) has sent $110 billion worth of subpoenas as part of its investigation into the proposed acquisition of Warner Bros Discovery by Paramount Skydance. The inquiry is focused on the deal's potential impact on the entertainment industry, including studio output, content rights, and competition among streaming services.

The DOJ is seeking information on how the acquisition would affect movie theaters, as well as the potential for massive layoffs and "synergies" worth $6 billion. Paramount has promised to pay $0.25 per share quarterly "ticking fee" to Warner Bros shareholders if the deal has not closed by October.

The investigation is also examining the potential impact on employment, with the Teamsters union expressing concern that the proposed merger "poses a direct threat" to jobs and output. The union has urged the DOJ to block the deal unless enforceable safeguards are put in place to protect jobs and output.

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The European Commission, Canada, and the California Attorney General's office are also reviewing the deal, with the European Commission engaging with third parties and Canada reaching out to at least one company. Paramount has been expecting authorities to review the deal, with Chief Legal Officer Makan Delrahim stating that the company is prepared for regulatory scrutiny.

The outcome of the investigation is uncertain, but the DOJ has the authority to block the deal or negotiate a settlement to resolve concerns. Acting Assistant Attorney General Omeed Assefi has stated that Paramount will not receive a "fast track" to approval due to political factors.