GoKawiilWhen the US Department of Justice approved Paramount Skydance’s proposed acquisition of Warner Bros. Discovery on Friday, a DOJ press release said “a rigorous eight-month investigation led by the [Antitrust] Division’s career staff” showed that the $111 billion deal would not harm competition or American consumers.
But according to The Wall Street Journal, the DOJ career lawyers who led that investigation “were leaning toward recommending a lawsuit challenging it on the grounds that the combination of the two movie studios would be anticompetitive and violate antitrust law.” DOJ senior leaders closed the investigation “before career staffers who were concerned about the acquisition had an opportunity to object, according to people familiar with the matter,” the WSJ reported.
Commenting on the report that the decision to allow the deal surprised staff investigators, Sen. Elizabeth Warren (D-Mass.) wrote that “the American people need to know if this merger was approved as a political favor. This reeks of corruption.”
Staff investigators hadn’t yet made a final recommendation to DOJ leaders but were questioning “how the combined company could meet its commitment to make 30 theatrical releases a year, given its increased debt load,” the WSJ wrote. Even if DOJ staff investigators had submitted a formal recommendation to challenge the lawsuit in federal court, leadership could have rejected the recommendation and approved the deal anyway.
Senior DOJ leaders “believed Paramount’s debt wasn’t a reason to challenge the merger,” the WSJ wrote. Federal Communications Commission Chairman Brendan Carr previously expressed support for the deal even though it needs an FCC waiver because it involves large equity stakes from the sovereign wealth funds of Saudi Arabia, the United Arab Emirates, and Qatar.