The lawsuit to block Paramount Skydance’s $81 billion takeover of Warner Bros. Discovery could chase away a key source of funds for California’s Democratic Party — namely, the deep-pocketed executives who run Big Media, The Post has learned.
Most of the workers in this ecosystem — the directors, screenwriters, stagehands and the reporters at the companies that combine entertainment with news gathering (like Warner, Paramount, Disney and Comcast), you name it — far outnumber the honchos and are reliable Democrats. But the real money for financing campaigns — and Dem coffers on the national level as well — comes from the top.
All of that could change, I am told, since California Attorney General Rob Bonta and a group of lefty AGs filed suit to break up Paramount’s WBD deal. Specifically, media and entertainment moguls, — many of them on Bonta’s home turf in Hollywood — are calling for the AG to reach a settlement with Paramount Skydance chief David Ellison, according to sources.
It’s the reason why you hear more mainstream state Dems calling for a settlement as well. To be clear, it isn’t because of any great love for Ellison, the upstart movie producer who, with the help of billionaire father Larry Ellison’s bank account, has been gobbling up ever-larger media giants for the past three years.
Rather, it’s pure self-interest — survival, actually. These execs see the writing on the wall: cord cutting is eating away at profits and revenues from cable bundles. People go to the movies less — far less — and streaming services are a tough business, too. Meanwhile, Big Tech is looming with troves of cash amassed from gadgets, social networks and search engines to fuel expansion into entertainment.
In other words, media and entertainment need to consolidate because their survival is in danger — that is, unless you want Amazon, Apple or tech-heavy streaming giant Netflix owning the entire viewing world (how’s that for antitrust).
The fact is, combining smaller companies like Paramount and Warner is the test case for survival in a business where Big Media and Entertainment are hobbled by balance sheets impaired by debt and lack of scale.
Or as one top media executive — a longtime Democrat — put it: “If this one guy [Bonta] can stop a deal like this, it’s game over for the industry. Why would we support this?”
Wary of far-left tilt
Granted, I haven’t conducted a proper survey on this thesis with scientific markers and percentage-point margins of error. I did, however, put in a bunch of calls to reliable sources who know this terrain well. What they tell me is that the typical media executive isn’t the DSA voter Bonta seems to be appealing to. These are people who would be comfortable with Bill (or Hillary) Clinton, and Barack Obama when he indulged the centrist side of his ID.
The sources are progressive mainly around social issues, don’t mind paying some of those high taxes to live in Cali, but are growing wary of the far-left tilt of the party. The homeless situation in LA and other California cities is a factor. The inept governance of politicians like LA Mayor Karen Bass is another. On top of it all, lower-cost venues without endless homeless encampments are offering incentives to shoot movies on their turf.
Yes, the insiders’ biggest concerns involve economics. And now a bunch of emerging lefty Dem pols like Bonta are acting purely politically, seemingly clueless about one of the state’s biggest businesses, employing some 700,000 people and producing $70 billion in tax revenues each year.
The pure- politics worry from the Hollywood C-suite comes from its legal counsel, who see no merit — like zero — in Bonta’s claim that consumers will be screwed by the merging of these companies and that by breaking up the merger, jobs somehow will be preserved.
Without consolidation, the Warner studio faces uncertainty given its debt load and lack of scale. Ditto for Paramount unless David Ellison can convince his dad to keep feeding his ambitions because its core business is even more troubled than WBD’s.
They all believe Bonta wants to be governor, sees his opening in the state’s progressive wing, and is using the case to gain name recognition — and do a little Trump bashing because of Larry Ellison’s friendship with the president.
As they’ve pointed out, the lawsuit puts Bonta and his team of recalcitrants, which includes NY AG Tish James, to the left of the European Union and the UK regulatory apparatus, some of the least deal-friendly types on the planet.
And they’re making their voices heard. That’s why you hear current California Gov. Gavin Newsom and the frontrunner to replace him, Xavier Becerra, calling for Bonta to enter settlement talks. That’s why all these folks, albeit quietly, are supporting David Ellison’s threat to take Paramount out of California to a place that actually wants the industry to survive, unless Bonta gets reasonable and drops his demands for spinning off vast pieces of Warner as the cost of doing a deal.
The bet in Hollywood is that pressure on Bonta will prevail and there will be a settlement. Still, if you’re playing Kalshi or Polymarket on this one, also remember that this isn’t Clinton’s or Obama’s Democratic Party.