\n
\n\t\t\tPopular on Variety\t\t<\/h3>\n<\/p><\/div>\n
\n\t\u201cI think this is a strong case,\u201d says Abiel Garcia, partner at Kesselman Brantly Stockinger LLP. \u201cI think a massive movie like \u2018The Odyssey\u2019 or \u2018Spider-Man\u2019 \u2014 these are very different movies than art films.\u201d<\/p>\n
\n\tThe suit, led by California Attorney General Rob Bonta, leans on a 9th Circuit Court of Appeals case from 1986, in which AMC accused rival circuit Syufy Enterprises of illegally monopolizing the San Jose, Calif., market for anticipated top-grossing films. Syufy argued that all first-run films effectively compete with each other \u2014 and that AMC\u2019s definition was too narrow.<\/p>\n
\n\tBut the court sided with AMC, noting that \u201cif the price for admission to \u2018E.T.\u2019 goes up, audiences will not flock to \u2018My Dinner With Andre.\u2019\u201d<\/p>\n
\n\tA lot has changed in entertainment in the past 40 years, but the state coalition is gambling that much is still true. Paramount Skydance has argued that the lawsuit is \u201cfundamentally flawed\u201d and vowed to fight in court.<\/p>\n
\n\tIt\u2019s a big risk for the states. Antitrust cases are expensive, and when states take them on they typically team with the Department of Justice, which has more resources to challenge the world\u2019s biggest companies.<\/p>\n
\n\tBut under President Trump, it\u2019s become a different story. Amid perception that federal enforcement has taken a backseat to crony capitalism, states have pursued a more aggressive course on case after case: HPE-Juniper Networks, Live Nation-Ticketmaster, and Nexstar-Tegna.<\/p>\n
\n\tThe DOJ has already given its blessing to the Paramount-Warner merger. In the Trump era, the states get the last word.<\/p>\n
\n\t\u201cWe\u2019re the most important law firm in the country right now,\u201d Paula Blizzard, the head of the California antitrust division, said on a panel last year. \u201cIt\u2019s very sexy to work for us right now.\u201d<\/p>\n
\n\tBlizzard came to the A.G.\u2019s office nearly a decade ago after a long career on both sides of antitrust enforcement. Early on, she worked in the DOJ\u2019s Antitrust Division in San Francisco, where she was part of the trial team that tried unsuccessfully to block Larry Ellison\u2019s software giant Oracle from acquiring PeopleSoft in 2005.<\/p>\n
\n\tNow Blizzard is taking aim at Ellison\u2019s son, David, who is seeking to use $40 billion of his father\u2019s money to combine two of Hollywood\u2019s five legacy studios. Blizzard\u2019s boss, Attorney General Rob Bonta, laid out the case against the merger at a press conference in front of the Hollywood sign
on July 13.<\/p>\n
\n\tAt times, his argument seemed more political than legal. The Ellisons have been courting Trum. The The Wall Street Journal reported that Larry Ellison gave $45 million towards his reelection. Bonta noted that he has already sued the Trump administration more than 70 times.<\/p>\n
\n\t\u201cTrump is pro -rigged economy, and so our role is more important,\u201d he said. Oregon\u2019s attorney general, Dan Rayfield, made a similar argument in his own news conference two hours later. \u201cThere is a credibility issue in the way that U.S. Department of Justice is making decisions,\u201d Rayfield said. \u201cWhat we want as states is a partnership with the U.S. Department of Justice, and we just don\u2019t have that right now.\u201d<\/p>\n
\n\tThe costs of going it alone are sizable. Between outside economists and litigators, the states could end up spending $20 million.<\/p>\n
\n\t\u201cCalifornia has a pretty large budget, but it\u2019s really nothing compared to the infrastructure the federal government has,\u201d says Marc Remer, a former DOJ economist who now teaches at Swarthmore College.<\/p>\n
\n\tCalifornia has been preparing for this fight. In May, Gov. Gavin Newsom sought and obtained an additional $14 million for antitrust enforcement, saying the DOJ had abandoned the field. The office has posted job openings for lawyers who want to work on Paramount-Warner Bros. and other high-profile cases.
\u201cWe\u2019re really hoping to get a lot of great new people to come help us do what we foresee is an increase in litigation in the next, say, two to four or five years,\u201d Blizzard said on an industry webinar in June. \u201cWe\u2019re doing all the fun cases.\u201d<\/p>\n
\n\tEven with DOJ support, bringing cases against powerful companies is always an uphill fight. And without it, California and the other states will be decided underdogs. Paramount has retained Jeffrey Kessler, a high-profile antitrust litigator who argued for the states in the Live Nation case, as well as Eric Stock, who ran the antitrust bureau at the New York attorney general\u2019s office, and Andrew Finch, a former top deputy to Makan Delrahim in the DOJ Antitrust Division. Delrahim is now Paramount\u2019s top legal officer.<\/p>\n
\n\t\u201cThis is a pro-competitive deal,\u201d Kessler tells Variety. \u201cIt\u2019s really needed for the whole industry. The new combination is going to produce more shows, more movies, than the two companies were producing on their own.\u201d<\/p>\n
\n\tHollywood unions are unconvinced by such promises.<\/p>\n
\n\t\u201cWe need assurances, and we need penalties tied to that,\u201d says Lindsay Dougherty, head of the Hollywood Teamsters union. \u201cThey can say this all day long. But if there\u2019s not any remedy tied to that, they could say one thing and do the other.\u201d<\/p>\n
\n\tAntitrust cases often end in a settlement that includes certain conditions. But for now at least, no deal has been forthcoming.<\/p>\n
\n\t\u201cWe\u2019re always open to hearing legitimate concerns,\u201d Kessler says. \u201cNothing has been proposed by the states.\u201d<\/p>\n<\/div>\n
Read More<\/a>
\n Cynthia Littleton<\/p>\n","protected":false},"excerpt":{"rendered":"Are blockbuster films a separate market? Or are they interchangeable with other forms of entertainment? The $111 billion Paramount\u2013Warner Bros. merger may hang on that question. On July 13, a coalition of 12 states sued to block the deal, arguing that it will lead to excessive concentration in the theatrical and basic cable markets. The<\/p>\n","protected":false},"author":1,"featured_media":919832,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1798,2403,1066],"tags":[7649,9978],"class_list":["post-919831","post","type-post","status-publish","format-standard","has-post-thumbnail","category-entertainment","category-fighting","category-states","tag-fighting","tag-states"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/919831","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/comments?post=919831"}],"version-history":[{"count":0,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/919831\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media\/919832"}],"wp:attachment":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media?parent=919831"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/categories?post=919831"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/tags?post=919831"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}