00:00A dozen states sued to block Paramount Skydance's acquisition of Warner Brothers Discovery today.
00:05In a press conference in Los Angeles, California Attorney General Rob Bonta,
00:09speaking for all 12 states' attorneys general,
00:12claimed the merger would harm competition in the movie industry
00:15and result in lower pay and fewer jobs for industry professionals.
00:18The states also argue the merger would hurt consumers
00:21by driving up cable package and movie ticket prices
00:24and offering fewer news and entertainment choices.
00:28We have antitrust laws and merger controls for a reason,
00:33because competition is the lifeblood of a healthy and vibrant economy.
00:41Competition pushes companies to produce their best work,
00:45to innovate and to offer fair and reasonable prices.
00:50Paramount Skydance, which is the parent company of CBS News,
00:53responded in a statement saying, quote,
00:54the lawsuit filed by the state attorneys general
00:56reflects a fundamentally flawed application of the antitrust laws
01:00and is both and is wrong on both the facts and the law.
01:03We will vigorously defend the transaction
01:05and demonstrate that this challenge is inconsistent with sound competition policy
01:10and the competitive realities of the media marketplace.
01:13CBS News senior business and tech correspondent,
01:15Jolene Ken joins me now.
01:17So what more do we learn from Attorney General Bonta about this suit?
01:20This is an investigation that's been going on for a few months.
01:22And finally today, A.G. Bonta, along with 11 other states, filed this lawsuit.
01:27And essentially what he's alleging here is that prices for movie tickets could go up,
01:32job opportunities could go down in their view,
01:34and you could see competition be harmed in violation of the Clayton Act,
01:38which is a major antitrust law.
01:41What we also learned from A.G. Bonta is this is a coordinated effort across states.
01:45And we're not just talking about California, New York, but it's also Colorado, New Mexico,
01:50Connecticut, Washington State, all coming together to try and go up against this merger,
01:55which is, by the way, recently was cleared by the DOJ.
01:58And the DOJ is saying that it would not likely result in harm to competition.
02:03What does this lawsuit mean now for timing and the bigger picture of the process?
02:08Yeah, that's a really important thing to note here,
02:10because Warner Brothers and Paramount want to merge, ideally, by September 30th.
02:16If they do not meet that deadline, there's a $650 million ticking fee per quarter.
02:22That's what comes out to about $0.25 per share that the company would have to pay.
02:27The other thing that's standing in their way, too,
02:29is there's a little bit of regulatory concern, too, in Europe as well.
02:33Even though in the statement today, Paramount did say, you know,
02:36we have received clearances from any number of these other countries.
02:39There's still other hurdles that need to be overcome here.
02:43But, I mean, 12 states suing to block a $110 billion merger is certainly very significant.
02:48And that ticking fee, if the merger is not fully completed by September 30th,
02:53could very much go into play if that, indeed, that timeline is not met.
02:57And so does this officially halt now, or they haven't filed whatever the wording is,
03:02I guess, like a preliminary injunction or something?
03:04Yeah, the lawsuit has been filed.
03:06And from what we understand, they also want to file potentially a restraining order of some kind,
03:12which would halt activity, potentially.
03:14But this is all, you know, moving day by day as the lawyers try to position themselves
03:20on their respective sides.
03:21But 12 states coming together to sue, no surprise here.
03:24But with Paramount responding the way they have,
03:26you can expect this is going to be a very intense legal battle.
03:29Okay, Jolene Kent, thank you.
03:31Thank you.
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