This BREAKING NEWS about “a meeting to discuss settlement in the Paramount merger case at Attorney General Rob Bonta’s office” is neither breaking, nor news.
The judge in this case has mandated that the parties meet to make good faith attempts to settle. This meeting is not elective by either side. It’s court mandated.
Paramount leaked this news to settle the nerves of their investors ahead of the October 1st deadline for their $7 million per day ticking fee.
Just hours before this leaked, Bonta was on CNBC talking about foundational, structural divestitures Paramount would have to make to satisfy the AGs’ demands and settle the case.
He also compared this case to the LiveNation/Ticketmaster case in which he and other AGs took the case away from the US Justice Department (sound familiar?), and won.
All of my reasons for my firm belief that this case will not settle this year, and the specific things that would need to happen for it to settle, are outlined in the video.
📉 The Real Math: Where My Numbers Come From
Under the SCOTUS 1963 ruling in US v. Philadelphia National Bank, a merger producing 30% of a market creates “a threat of undue concentration,” unlawful under Section 7 of the Clayton Act.
Long-standing DOJ antitrust guidelines consider “a market share exceeding 20% by a consolidated entity an illegal monopoly power.”
In cable, NepoMount would control 34% of viewership and 27% of affiliate fees and 27% of the film distribution markets: “monopolistic power,” as specifically stated in the AG filings. They’re a good read. Like True Crime. Take the time to digest them.
To get under these "safe" thresholds, NepoBros would have to sell a sizable share of assets, in a manner that those assets remain viable as stand-alone competitors.
That’s the point of an antitrust case.
To do that, NepoBros would need to spin out between 30-40% of the cable assets & 40-50% of film distribution / production assets. It’s maths.
One of many sources: https://insights.som.yale.edu/insights/the-problems-with-the-paramount-warner-merger
You do NOT have to agree with the Attorneys’ General’s case, or even think they’re going to win, to see that they hold all the cards.
The ticking fee is a time bomb for NepoMount. October 1st is looming. And Larry is running out of money. So don’t expect big news out of Monday’s big meeting.
Have a great weekend!
ESHAP
