DOJ staff concerns surfaced after Paramount-Warner deal cleared

The Justice Department cleared Paramount Skydance’s planned $111 billion purchase of Warner Bros. Discovery despite internal concerns from career antitrust lawyers, according to The Wall Street Journal. The report raises new questions about how senior officials reached a decision on one of the biggest media mergers now before regulators.

DOJ announced Friday that it had ended its antitrust investigation, saying its career staff had conducted an eight-month review and found the transaction would not hurt competition or consumers. The department said the deal could strengthen competition in streaming by creating a larger rival to existing services.

The Wall Street Journal reported that some career lawyers who worked on the review were leaning toward advising the government to sue to block the merger. Citing people familiar with the matter, the Journal said senior DOJ officials closed the inquiry before those staff members had a chance to formally object.

The staff had not delivered a final recommendation, according to the Journal. The report said investigators were examining whether the combined company could still meet a promise to release 30 films in theaters each year while carrying more debt.

Senior officials defended the review

The Journal reported that DOJ leaders did not view Paramount’s debt as a basis for an antitrust lawsuit. Even if career staff had urged a court challenge, senior officials could have rejected that advice and allowed the deal to proceed.

US Associate Attorney General Stanley Woodward Jr. challenged the Journal’s account in a post on X directed at reporter Sadie Gurman. Woodward wrote that if career lawyers had concerns, they had not raised them with their chain of command, and he said his door was open to the unnamed sources cited by the Journal.

The Journal also reported that Paramount Chief Executive Officer David Ellison helped ease concerns among senior DOJ officials during a two-hour interview last month. Ellison is the son of Larry Ellison, an ally of President Donald Trump.

Sen. Elizabeth Warren, D-Mass., responded to the Journal report by saying the public needs to know whether the merger was cleared as a political favor. Warren wrote on Bluesky that the situation “reeks of corruption.”

Deal still faces other reviews

The Justice Department said in its announcement that the merger is unlikely to reduce competition in theatrical film development, production or distribution. DOJ said evidence showed strong competition in the movie business and continued variety in film releases.

The deal would combine Paramount+ with HBO Max. It also requires action from the Federal Communications Commission because of large equity stakes tied to sovereign wealth funds from Saudi Arabia, the United Arab Emirates and Qatar, according to a Senate Commerce Committee letter. FCC Chairman Brendan Carr had previously signaled support for the merger.

Warner Bros. Discovery earlier had a merger agreement with Netflix and criticized Paramount’s bid as dependent on unusually large debt financing. Paramount kept pursuing the company and later won a bidding contest, according to prior reports.

The merger may still face lawsuits from state officials. Reuters has reported that California, New York and other states are preparing to sue to block the transaction. Reuters has also reported that European Union regulators are reviewing the deal’s financing and competition effects.

The fight could echo another split between state enforcers and the Trump administration. In the Live Nation-Ticketmaster case, the Trump administration dropped the Justice Department’s push for a breakup during trial, while states continued the case and later won a jury verdict finding the companies operated an illegal monopoly, according to earlier reports.

This story draws on original reporting from Ars Technica.