• by Adam Buckman , Featured Columnist, 7 hours ago

Attorneys general in 12 states think the merger of Paramount and Warner Bros. Discovery will create a monopoly that will dominate TV news, basic cable and movie theaters.

This issue has come up many times before -- the notion that big companies control too much media and, in the process, stifle diverse voices in news and other content, harm consumers by restricting their entertainment choices, and generally possess too much economic power.

“Antitrust enforcement is an essential component of a healthy economy,” says a statement from the office of California Attorney General Rob Bonta released on July 13.

That was the day 12 states joined together as a coalition to oppose the merger. Besides California, they are Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington.

“Competitive marketplaces established through antitrust vigilance help consumers by ensuring fair prices for goods and services, an array of products to choose from, quality goods and services, and the steady introduction of innovative new products,” the California AG’s statement says.

TVBlog hereby opposes the points brought up in this statement.

On the subject of fair prices for goods and services: Where consumers are concerned, one assumes this is talking about cable subscriptions that allow consumers to watch all of the basic cable channels this merged entity will own.

But cable subscription prices are set by the companies that run the cable systems, old-fashioned as they may be. 

These entities have long held monopolies in local markets and their rates are sky-high. Maybe somebody ought to sue them.

As for the portfolio of basic cable channels the newly merged company will own, the lawsuit says these properties will control 27% of basic cable.

With the state that basic cable is in now, this commitment to basic cable represents a risk and a liability for the company, not the other way around.

Now, the new company will own a quarter of a business sector of the television business that is sucking wind.

The new company, at the outset at least, will essentially be keeping entertainment choices alive for consumers even though the numbers show consumers are abandoning this great array of choices.

And if the new company decides to shut down some of these money losers, then their 27% share of the market would be reduced based on marketplace realities. Isn’t that what the antitrust AGs want in the first place?

The California statement says the new company’s ownership of so many cable channels will give it unfair leverage in its distribution negotiations with cable and satellite providers.

Maybe. But here again, the marketplace can decide this. It’s a battle between two businesses -- basic cable and local cable systems -- that have both seen better days. They depend on each other, which would seem to give leverage to both. 

Of course, content providers such as basic cable channels can undertake a digital migration to other platforms, which they are doing now.

Cable systems can serve as providers of streaming services, which they are also doing now. Both sectors will innovate or die.

Speaking of which, the state AGs think the Paramount-WBD merger will stifle “the steady introduction of innovative new products.”

This is ridiculous on its face. These companies have long been consistently innovative. They embrace new technologies, devise new forms of content-creation and continually remake aspects of their operations.

Their businesses depend on it. It is difficult to see how this merger will leave consumers with fewer entertainment choices. On the contrary, they will likely have more of them.

The California AG’s press release does not raise the issue of media concentration in news -- the “diversity of voices” issue -- perhaps because that ship has sailed.

Once upon a time, a single company could own only seven TV stations, seven AM radio stations and seven FM radio stations. In 1984, this was revised to 12 of each. Today, all of that stuff is out the window. 

One company, Nexstar, owns 265 TV stations that are collectively estimated to reach 80% of the U.S. Second-place Sinclair Broadcast Group owns 193 stations covering 40%.

In the realm of radio-station ownership, iHeartMedia owns 870 them; Cumulus Media, 404; and Audacy, 227.

As I understand it, and very generally speaking, the old ownership caps eventually fell by the wayside because today media outlets number in the tens of thousands everywhere.

With that in mind, the notion that the mass ownership of media stifled diverse voices has become outmoded, even as some continue to debate it.

At any rate, all of this may turn out to be futile anyway since the merger is now in doubt.

In response to 12 states ganging up on the company, Paramount announced that it is pausing its efforts to complete its merger with WBD until June 1, 2027, while it works its way through 12 lawsuits.