(Bloomberg) — California Governor Gavin Newsom said he would prefer a settlement of the state attorney general’s lawsuit opposing Paramount Skydance Corp.’s $110 billion acquisition of Warner Bros. Discovery Inc. “if it’s a good deal.”
“That has to be worked through, and that’s a process that’s unfolding,” Newsom said Friday at a press conference in San Francisco. “I’m concerned about the state, our reputation.”
As of last week, Paramount had won regulatory clearance from 68 jurisdictions around the world for the deal, leaving a group of states led by California Attorney General Rob Bonta as the final impediment to a closing. They argue that the merger combining major film studios, news networks and streaming services would hurt film and television distribution, and result in fewer jobs in the entertainment industry.
The comments from Newsom come after the Wall Street Journal reported last month that the Democratic governor had expressed concerns about the state’s antitrust lawsuit. According to the Journal, Newsom told people involved with the matter that state employment would suffer if the deal is blocked as a result of the suit, and his office encouraged Bonta’s office to seek a resolution.
Last week, Democrat Xavier Becerra, the frontrunner in this year’s race to succeed Newsom as governor, urged the two sides to “be adults,” saying that a settlement would be the best outcome of the lawsuit.
Hanging over the legal battle is the risk that Paramount Chief Executive Officer David Ellison would yank the company out of California.
The company’s board has approved a possible move to another state as early as Oct. 1, according to a person familiar with its plans. Ellison told senior executives last week that the move would involve headquarters staff first but that he’s putting together a five-year plan that would shift most of the film and TV studio’s jobs to the new home, said the person, who asked to not be identified because the internal deliberations aren’t public.
Newsom said he didn’t think the company wanted to leave California while adding that he’s taking the possibility seriously.
“I hope that doesn’t happen, and I’m of the belief that they don’t want to see that happen,” Newsom said. “I’m talking about the future of the industry. I’m talking about Hollywood.”
More stories like this are available on bloomberg.com
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