U.S. Justice Department Clears Paramount's Bid for Warner Bros. Discovery

The U.S. Justice Department said Saturday it has approved Paramount’s plan to buy Warner Bros. Discovery, a deal widely seen as one of the biggest in American media in recent years. If completed, it would further shrink the number of major U.S. media conglomerates and greatly expand the influence of the Ellison family over news, entertainment, and streaming.

In its statement, the department rejected the main arguments against the merger. Regulators said Disney’s earlier purchase of Fox could not be treated as a useful precedent because the coronavirus pandemic materially distorted market results. They also dismissed labor concerns raised by employees and professional groups about the deal’s effect on jobs in the industry.

Under the transaction, Paramount-Skydance chief executive David Ellison would gain control of major assets including Warner Bros. studios, HBO, HBO Max, CNN, and Warner Bros. Games. Those properties would join a portfolio already containing Paramount, CBS, MTV, BET, and Nickelodeon. The deal is being backed in part by his father, billionaire Oracle founder Larry Ellison, who is reportedly providing about $45.7 billion in equity financing. Together, father and son would command a media empire that is approaching Disney’s scale and power.

The approval comes at a sensitive time for Paramount’s news businesses. CBS News has faced internal disputes and management decisions that drew criticism, including the cancellation of Stephen Colbert’s show, which the company said was for financial reasons but came soon after Colbert attacked CBS’s $16 million settlement with President Donald Trump. Attention is now shifting to CNN, which critics fear could undergo similar changes, especially because of Larry Ellison’s ties to Trump and Trump’s past criticism of CNN’s leadership.

The entertainment industry also pushed back. In May, more than 5,500 film and television workers signed an open letter warning the merger could damage the stability of the creative community, with signatories including Jane Fonda, Glenn Close, Joaquin Phoenix, and Kevin Bacon. Despite the Justice Department’s approval, the deal still faces possible legal action from New York and California attorneys general, as well as regulatory reviews in Britain and Europe. Paramount-Skydance must close the transaction by September 30 or begin paying Warner Bros. Discovery shareholders a $7 million daily penalty.