Hollywood’s two major unions urged California Attorney General Bonta and Paramount Skydance CEO Ellison on Wednesday (12th) to settle the lawsuit over Paramount’s proposed merger with Warner Bros. Discovery, to avoid further damaging the interests of millions of industry professionals.
The Directors Guild of America (DGA) and the International Alliance of Theatrical Stage Employees (IATSE) issued a joint letter to both parties, urging them to “engage in direct dialogue” to negotiate a settlement for the “antitrust allegations” in the lawsuit, or to expedite the trial date. The two unions collectively represent about 200,000 industry professionals, including directors, technicians, and artists.
“If such an agreement cannot be reached, we hope the parties seek to expedite the trial date, as the ongoing delays in litigation and uncertainty surrounding the future of Warner Bros. Discovery are harming the interests of our members,” the unions stated. The current trial schedule would extend the uncertainty of the proposed merger at least until next spring, further harming an already struggling industry.
At the time of the unions’ request, it was reported that Paramount executives were considering relocating their studios out of California.
The unions pointed out that globally, film and television production has declined by 35% to 40%, with California experiencing an even greater decline. More and more production is shifting to regions outside the United States. Members of the two major unions are struggling to find work, and the uncertainty brought by the proposed merger exacerbates their plight.
“We have learned that some production projects have been halted or even completely canceled, further reducing job opportunities for our members and other professionals,” the unions stated.
In their letter, DGA National Executive Director Russell Hollander and IATSE President Matthew Loeb expressed their belief in the importance of market competition and raised concerns about the proposed transaction. They suggested that the California government and Paramount agree to several conditions proposed by the unions to settle the lawsuit, including Paramount committing to continue being based in Los Angeles.
The unions further recommended that both companies maintain independent production studios, each retaining their production, distribution, marketing, and theatrical release departments; produce and release at least 15 theatrical films annually, ensuring each film is available for home rental or purchase only after a 45-day theatrical run; and wait at least 120 days before releasing films to streaming services.
The recommendations also include retaining the HBO premium channel, among other similar requests.
In response to the unions’ demands, the California Department of Justice reiterated the allegations made in the lawsuit that the merger violates antitrust laws. California, along with attorneys general from 11 other states, is leading this legal action to block the transaction.
A spokesperson for the California Department of Justice emphasized to Epoch Times, “As it stands, the proposed Warner Bros./Paramount merger would mean higher costs, less competition, lower wages, job cuts, and fewer film and television programs. This merger violates long-standing federal antitrust laws. We remain committed to enforcing the law.”
Paramount Skydance did not respond to requests for comments on the union’s proposals.
If the lawsuit continues beyond June 2027, the delayed completion of the merger could increase transaction costs by $1.9 billion.
Ellison published a commentary on the 4th defending the deal: “Ultimately, the success or failure of a film, the flourishing or decline of a news organization, and the success or failure of our industry is determined by the audience, namely the American people.”
“I want to build a company with the strength and resources to serve the audience who chooses us, the people who depend on us to tell stories, and the nation that nurtures all these dreams,” he said.
Regarding Bonta’s request to extend the trial period, Northern District of California Federal Court Judge Martínez-Olguín has scheduled a 12-day jury trial to begin on March 2, 2027.
After the judge’s order in July prohibiting the two companies from completing the acquisition, the $110 billion entertainment industry merger has been put on hold. Paramount voluntarily suspended the transaction that month, pending the conclusion of the trial or until June 1, 2027.
More than 60 regulatory agencies from multiple countries have already approved this merger, including the United States, the European Commission, the UK, Australia, Brazil, Canada, Chile, China, New Zealand, Saudi Arabia, Germany, France, and Spain.