Justice Dept. Clears Way for Paramount-Warner Bros. Merger

The Justice Department will not challenge Paramount’s merger with Warner Bros. Discovery, clearing a major hurdle for the $111 billion deal, the agency said Friday.

The merger would consolidate the ownership of two major movie studios; two major streaming services, Paramount+ and HBO Max; and two television news networks, CNN and CBS News, under the leadership of the tech scion David Ellison.

The scale of that combination has raised concerns that it could reduce the number of buyers for TV and movie scripts and potential employers for actors and crew members, driving down wages and the prices paid for creative material. The Justice Department blocked a publishing deal in 2022 over similar claims.

In an unusual statement announcing its decision, the Department of Justice said its investigation of the deal had included hours of depositions, interviews and meetings that “all led to the same conclusion: The film and television industry is highly dynamic, and the proposed transaction is not likely to harm competition or American consumers.”

That statement could help Paramount fight any future challenges. Some state attorneys general have pledged to take a hard look at the deal, and could bring their own case. Also, an antitrust regulator in Britain said this week that it would launch its own investigation of the deal.

A spokeswoman for Paramount, Susan Friedman, said in a statement on Friday that the merger would result in a “stronger company” that could succeed “in an industry increasingly defined by intense competition for audiences, talent, technology and investment.”

President Trump’s ties to Mr. Ellison and his father, the Oracle founder Larry Ellison, have drawn criticism as Paramount’s deal for Warner Bros. has undergone government review. Larry Ellison is friendly with Mr. Trump, and has pressed the case for Paramount’s ownership of Warner Bros. Discovery with the president. In April, as the Justice Department was reviewing the deal, Paramount hosted a dinner for the purposes of “honoring the Trump White House” where Mr. Trump and David Ellison sat at the same table.

Mr. Ellison acquired Paramount last year in an $8 billion deal, buying the company from its controlling shareholder, Shari Redstone. Weeks earlier, Paramount had settled a lawsuit filed by Mr. Trump over an interview on CBS News’s “60 Minutes” for $16 million.

With the Justice Department investigation now closed, the two largest potential obstacles to the deal are state attorneys general and overseas regulators.

A spokeswoman for California’s attorney general, Rob Bonta, who has been investigating the merger, said that the matter “remains under investigation by the California Department of Justice” and that the office had no further updates.

Bill Baer, who led the Justice Department’s antitrust division under President Barack Obama, said the department’s statement “will offer Paramount a federal government stamp of approval on the arguments they will no doubt make if there is a challenge by the states or by private plaintiffs.”

Mr. Baer added that it was the “most detailed explanation” he had ever seen by the agency for declining to challenge a transaction.

Paramount has a major financial incentive to close the deal soon. The company pledged to pay Warner Bros. Discovery shareholders 25 cents per share each quarter if the deal doesn’t close by Sept. 30, which would add to the deal’s hefty price tag.