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- [00:01]
A
Find home wherever you roam at Sinesta Es and Simply Suites. Stretch out and enjoy homelike amenities for however long you need. And when you're a Sonesta TravelPass member, staying at Sonesta Es and Simply Suites means earning points toward free nights, upgrades and more. Go to sonesta.com to book your stay and unlock their best rates with Sonesta Travel Pass here today, Rome tomorrow. Join now@sonesta.com terms and conditions apply. Bloomberg Audio Studios Podcasts Radio News it's
- [00:35]
B
balance of power on Bloomberg TV and Radio. I'm Joe Matthew. Thanks for joining us on the Friday edition. After a months long battle for Warner Brothers, Paramount has officially outbid Netflix by agreeing to pay $111 billion for the Hollywood studio and paying Netflix for the $2.8 billion breakup fee to terminate its initial merger agreement just a short time ago. The merger raising concerns about market consolidation, of course, job losses. You've heard about it on Bloomberg. It's still pending regulatory approval with Paramount chief David Ellison already asked to testify before Congress next week as Democratic Senator Cory Booker announces a probe into the potential Paramount Warner Brothers merger. And Booker is not the only one. With California's Attorney General Rob Bonta warning Paramount's WBD takeover is not a done deal yet, vowing a vigorous investigation and he's with us right now for more. Attorney General, is this deal not over? What are you looking at?
- [01:30]
C
Not a done deal? The regulatory process still needs to be completed. There are hurdles there that have not been traversed yet by this, this proposed deal. And we have a job to do and we're going to do it. We are. We have an investigation. We're looking at the deal, we're looking at its potential anti competitive impacts. And we know that corporate consolidation tends increased prices, lower wages, lower competition, lower quality and limit choice. So we're going to take a close look at that as is our job, and make an independent assessment based based on the law and the facts.
- [02:07]
B
I suspect that's an investigation that could take some time. This is a massive and sprawling deal with a lot of properties. Attorney General the critics say the problem with this deal and those who favored the idea of Netflix buying it is that this takes an entire movie studio off the table. Is that how you're looking at this and what would that mean for California's economy?
- [02:28]
C
Well, one of the we are looking at that for sure. One of the first questions is what is the appropriate market at issue? The market definition and one is studio, you know, it will be a studio market consolidation there's also a streaming service market consolidation here. So there's a couple of different markets at issue. And you know, California is the home of Hollywood with the fourth largest economy in the world. What could this merger, should it go through and be approved and get through the regulatory process mean? It could mean less choices for consumers, higher prices for consumers, less a less robust creative output and set of processes. It can mean, you know, fewer choices and lower quality. So there's a lot at stake here for the 40 million Californians. But these companies, they're so large, there's going to be impacts nationwide and worldwide as well.
- [03:22]
B
You know, it's of course, not just studios, not to streaming services. It's also news. And you start talking about information on public areas. In the case of CBS or otherwise on cable with cnn. Do you worry about consolidation in that business? Do you need promises that that would not take place?
- [03:41]
C
I do worry about that. I think we all are worried about that and should be worried about that. We've seen what's happened to our independent objective news that we sort of value and we take steps to protect that. So that is an important area that we're looking at among the, you know, many other broader areas. And we haven't gotten ahead of ourselves as to what the potential, you know, remedy is or conditions or, you know, whether we think there's no way that there could be a set of conditions or remedies or maybe we like it exactly the way it is. Okay, so we're not prejudging, but we're looking closely, as we should, as is our duty and obligation.
- [04:20]
B
I want to move on to some other topics, but you have a sense of how long it'll take before you make that determination because the two companies,
- [04:28]
C
Paramount and Warner Brothers, are moving so quickly. We're going to have to take some action at least to maintain the status quo soon, if that's what we decide we need to do. And then we'll continue the ongoing investigative process and, you know, any other action to follow. But we, we can't let this get too far without some action. So you'll probably see something sooner than later.
- [04:50]
B
Weeks, not months. Correct. Great. Attorney General, I want to ask you about tariffs. It was one week ago today, kind of hard to believe that the Supreme Court ruled to strike down the president's tariff regime. He's of course, taken some series of actions since then to try to reinstate across the board global tariffs. And he talked about this at his State of the Union address this week. Let's listen.
- [05:12]
D
They're a little more complex, but they're actually probably better. Congressional action will not be necessary. It's already time tested and approved. And as time goes by, I believe the tariffs paid for by foreign countries will, like in the past, substantially replace the modern day system of income tax.
- [05:33]
B
Of course, that was a loaded statement on its own. Attorney General, you called it a tremendous win the way the Supreme Court ruled. But if the President is following up with 301 or some other mechanism to put more tariffs in place around the world, how does anything change?
- [05:49]
C
Well, let me first say I expected the US Supreme Court to decide almost exactly the way they did. Having been at the argument for the U.S. supreme Court that, you know, the 6:3 decision of the majority, as well as the reasons it was basically track, the reasons we advanced in our briefing to the US Supreme Court. Of course, Trump is absolutely dead set, even after suffering this embarrassing loss on his centerpiece economic policy to continue to try to raise prices for Americans. Unfortunately. Unfortunately. And so our role here is to see if his current tariffs are lawful or not. And we're looking, we're looking with other states. We're concerned. They are global tariffs that he has imposed based on a statute for which it does not necessarily appear that he's met the requirements. There are requirements. Before you can impose those, Paris, those tariffs, there needs to be a balance of payments deficit. There's also limits about how much, how long, how high they can be, the tariffs themselves, and how long their duration can last. So there are limits set by Congress. And right now we have some major red flags that have been raised around whether those requirements are being met here.
- [06:59]
B
Well, I'll tell you, it's been pretty amazing. We're going to have to get some more lawyers. Attorney General, since the ruling, more than 100 companies have filed new lawsuits to try to get refunds here. And I mean, these are some big names you already knew about Costco, you had FedEx, Dyson, Dollar General, Bausch Loan, Brooks Brothers. This is quite the list. Knowing that the justices were silent on refunds, is this what we're going to do for the next three years?
- [07:23]
C
I mean, it should be done quickly and expeditiously. Trump unlawfully raised costs for these companies and these costs were passed on to Americans. They deserve a refund with interest, period, full stop, interest to them as soon as possible. And, you know, he shouldn't fight it in court. He was deemed to be wrong by the highest court in the land, a court where he appointed three justices. Two of those justices were in the majority opinion against him because they're following the law and because he's done something so clearly unlawful. The authority he cited gave him no right to impose any tariffs. They have never that authority never used the word tariffs in its statutory language and it was never used in nearly its 50 year existence to impose tariffs before. So yeah, he did something unlawfully, he did something wrong. He victimized these companies Americans by raising prices. He should make it right by providing restitution and refunds immediately.
- [08:12]
B
Well, I'll tell you, we'd like to stay in touch with you on both of these issues. Come back and talk to us when you decide what to do with Warner Brothers Attorney General Rob Bonta of California. We thank you for the insights.
- [08:22]
A
Find home wherever you roam at Sonesta? Es and Simply Suites. Stretch out and enjoy homelike amenities for however long you need. And when you're a Sonesta Travel Pass member, staying at Sonesta Es and simply Suites means earning points toward free nights or upgrades and more. Go to sonesta.com to book your stay and unlock their best rates with Sonesta Travel Pass here today, Rome tomorrow. Join now@sonesta.com terms and conditions apply.