Paramount-WBD deal blocked by California AG could push entertainment moguls to pull campaign funding from state Democrats, sources say.
California Attorney General Rob Bonta's lawsuit to block Paramount Skydance's $81 billion takeover of Warner Bros. Discovery could dry up a major funding source for the state's Democratic Party, according to executives and political insiders who spoke with The Post.
Entertainment-industry moguls – many based in Bonta's own backyard in Hollywood – are calling on the attorney general to reach a settlement with Paramount Skydance chief David Ellison. The concern among top executives is that Bonta's aggressive antitrust stance will push dealmaking out of reach for an industry that needs consolidation to survive, several sources said.
"If this one guy can stop a deal like this, it's game over for the industry. Why would we support this?" one top media executive, a longtime Democrat, told The Post.
The stakes extend well beyond a single transaction. California's entertainment sector employs roughly 700,000 people and generates about $70 billion in annual tax revenue. The workers who fill the ranks – directors, writers, stagehands – lean heavily Democratic in their voting. The real money for campaigns comes from the corner offices.
Cord cutting is squeezing profits from traditional cable bundles. Movie theater attendance has fallen sharply. Streaming services remain a tough business with thin margins. Amazon, Apple and Netflix have the cash to expand into entertainment without needing mergers, the executives argued.
Bonta, joined by New York AG Tish James and other Democratic attorneys general, filed suit to block the Paramount-WBD combination on the grounds that it would harm consumers. The legal theory holds that merging the two studios would reduce competition and eliminate jobs.
Industry lawyers see no merit in that claim, the sources said. Without the deal, Warner faces uncertainty given its debt load and lack of scale. Paramount's core business is even more troubled than WBD's. Consolidation, they argued, is a survival move.
Bonta's lawsuit puts California to the left of the European Union and UK regulators on antitrust enforcement, according to executives who have reviewed the legal arguments. Both the EU and UK cleared similar combinations with conditions rather than outright blocking them.
Governor Gavin Newsom and frontrunner candidate Xavier Becerra have publicly called for Bonta to enter settlement talks, a sign that the political pressure is building. David Ellison has threatened to move Paramount's operations out of California if the state does not back down, according to people familiar with his thinking.
The Hollywood bet is that pressure on Bonta will lead to a settlement. The damage to the relationship between the state's Democratic establishment and the industry's top donors may already be done, several sources said.
"These are not DSA voters," one source told The Post. "They were comfortable with Clinton and Obama. They're progressive on social issues and don't mind the taxes. The far-left tilt is wearing thin."
The sources cited the homeless crisis in Los Angeles and other California cities, the governance of LA Mayor Karen Bass, and lower-cost venues offering incentives to shoot movies on their turf as additional factors pushing executives away from the state's Democratic establishment.
Drafted by a large language model from the source reporting linked above, then screened by automated publishing checks. It is not read by a journalist before publication. Some articles cite our Alpha Score. Verify prices and figures against the original source. Educational coverage, not personalized advice.