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Paramount defends Warner bid amid California probe / Photo: © GETTY IMAGES NORTH AMERICA/AFP
NYSE - LSE
Paramount defends Warner bid amid California probe
Paramount Skydance has defended its attempt to buy the legendary Warner Bros. studio, in a letter to California's top lawyer whose office is probing the $110 billion bid, US media reported Tuesday.
The move comes amid growing calls for regulators to block the takeover, with creators in Hollywood fearing the highly leveraged buyout will mean job cuts and a drastically scaled back movie slate, with production going straight to streaming.
In a letter addressed to state Attorney General Rob Bonta, Paramount says it is deeply committed to producing films and showing them in cinemas.
"Theatrical runs increase awareness and anticipation through marketing and word-of-mouth, and then help convert that demand into viewing when the title later becomes available (and promoted) on the platform," reads the letter, sent on May 7 by Paramount's Chief Legal Officer Makan Delrahim, according to the news site Semafor.
The new company "will have every incentive to get more films into wider distribution on more movie theater screens -- it is how it will compete for audiences across the entertainment ecosystem."
In the eight-page document, Paramount reiterates its pledge to release at least 30 films per year if the acquisition is approved, with a minimum 45-day exclusive theatrical window.
A bidding war for Warner Bros., and its valuable back catalogue erupted last year between streaming giant Netflix and Paramount, whose CEO David Ellison is the son of Oracle co-founder Larry Ellison, an ally of President Donald Trump.
A wary Tinseltown reluctantly coalesced around the Netflix bid, seeing it as the lesser of two evils, but Paramount's willingness to stump up ever greater sums eventually saw the streamer withdraw.
Still, hundreds of actors and directors have signed a letter opposing the merger, arguing it will crimp production in an already struggling industry.
Bonta previously announced that his office would closely scrutinize the mammoth transaction, which received final approval from Warner Bros. Discovery shareholders last week.
Combined, Paramount and Warner Bros. Discovery will encompass CNN, CBS, HBO, and Nickelodeon, as well as some of Hollywood's most valuable franchises, including "Harry Potter," "Game of Thrones," the DC Universe, "Mission: Impossible," and "SpongeBob SquarePants."
A spokesman from Bonta's office declined to confirm the existence of the letter.
L.M. Cardoso--JDB
