DOJ staffers opposed to Paramount-WBD merger had no opportunity to object before approval, per report

A team of career Justice Department staffers were prepared to object to Paramount’s acquisition of Warner Bros. Discovery on antitrust grounds, but the deal was waved through by senior leadership before any formal action was able to materialize, according to a report by Dave Michaels, Dana Mattioli, Sadie Gurman, and Jessica Toonkel in The Wall Street Journal.

Last week, the Justice Department approved Paramount’s $111 billion acquisition of Warner Bros. Discovery, an outcome that was widely expected given Paramount owner David Ellison’s ties to the Trump administration. The transaction still faces hurdles from a group of state attorneys general and European regulators, but the Justice Department, in theory, had the most straightforward ability to oppose the deal.

It appears, had the career lawyers at the agency gotten their way, they would’ve recommended a lawsuit challenging the deal. However, the Justice Department moved forward prior to the team’s formal recommendation having been submitted, a quite abnormal step to take, per the Journal report.

“The Justice Department’s senior leaders believed that Paramount Chief Executive Officer David Ellison, son of Trump ally Larry Ellison, persuasively addressed many of the staff’s questions about the deal during a two-hour interview last month, according to people familiar with their thinking,” the report read.

Among the reasons for opposition within the Justice Department was skepticism surrounding the combined company’s assertions it could release 30 theatrical films per year while taking on enormous amounts of debt.

Per the report, Justice Department leaders typically follow staff recommendations on mergers, but there are also times when the two sides reach different conclusions. The merger has been faced with opposition from Hollywood trade unions, politicians, state and local officials, and international regulators.

Paramount is targeting the third quarter of this year to close the deal and formally combine operations.

Should the transaction finalize, CBS Sports and TNT Sports would likely combine into a single entity, bringing sports properties from both sides under one umbrella.