Paramount Has a Secret Plan to Buy Hollywood Before the Cops Arrive

For a few months now, there’s been a bidding war between Paramount and Netflix to buy Warner Bros Discovery. Netflix seemed to have clinched the deal when the board of WBD accepted their offer. Paramount, which is owned by the billionaire Ellison family, got very nasty about the situation, suing on procedural grounds and trying to get shareholders to revolt. Ultimately, they are going to do what they had to do from the very beginning to win the bidding war - offer more money.

But a contact let me on to something odd about the Paramount approach: the company says it has mostly completed the extensive legal paperwork necessary to acquire WBD. And that’s both very weird and very important, for reasons I’ll get into, because it suggests Paramount’s people believe the fix is in, on their behalf.

First, let’s discuss the bidding war itself. Both the Paramount and Netflix offers are legally problematic, for slightly different reasons. If Netflix wins, it will likely end up killing the theatrical release business, and entrenching its dominance in streaming. European antitrust enforcers are wary of Netflix, as is the Trump DOJ. Paramount has a different legal problem. The case is much simpler, because it’s a combination of two direct rivals going head-to-head in a concentrated market. A merger of Paramount and WBD would include two out of five movie studios and distributors, two major TV studios, two big sports distributors, and so forth.

We know what happened when Disney bought Fox - the number of released movies decreased by 44%. The same thing will happen here, especially considering how many people Paramount is likely to fire. That violates all sorts of merger guidelines, which are the way enforcers think about how the Clayton Act works.

There’s an additional problem for Paramount, and that’s the obvious censorship and cronyism. The Ellison’s are new to owning Paramount, having bought it last year. And in that time, they have taken a number of steps, including firing Stephen Colbert, that are obvious attempts to please Trump. Then this Monday night, Colbert, in his last few months on the job, claimed that CBS, which is owned by Paramount, would not allow him to interview a Democratic Senate candidate, James Talarico. As former FTC commissioner Alvaro Bedoya notes, the conspiracy is pretty open.

Now, it’s not an antitrust problem that CBS