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A
Hello and welcome to the Votes and Verdicts Podcast hosted by the Litigation and Policy team at Bloomberg Intelligence, the investment research platform of Bloomberg LP. On the Bloomberg Terminal, Bloomberg Intelligence has 500 analysts and strategists working across the globe and focused on all major markets. Our coverage includes over 2,000 equities and credits, and we have outlooks on more than 90 industries and 100 market indices, currencies and commodities. This podcast series examines the intersection of business policy and law. My name is Elliot Stein. I'm an analyst with Bloomberg Intelligence covering litigation in the financial sector, and I am delighted today to be joined, as always, by several of my BI colleagues. Today is July 2, 2026, and we thought it would be a good idea to do an episode looking at some of the most important policy and litigation catalysts that our team will be watching in the second half of the year and that we think will impact companies across a number of different sectors. As always, you can find all of our research on the Bloomberg Terminal at BI Go. You can find our litigation and policy dashboard on the terminal at Bi Go Laws Go. And with that, let's dive into the content and let me bring in our chief policy analyst down in Washington, D.C. nathan Dean. Nathan, you staying cool down there?
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C
Sitting in a Bloomberg office, it's always cool in here.
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A
So, yes, cool. And free coffee and snacks.
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C
Exactly.
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A
Any big plans for the 4th?
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C
We're flying to Chicago tomorrow to go visit Camp Grandma and Grandpa. And then once we celebrate the fourth, my wife and I are going to leave to go to Canada for a couple of days of hiking where they're having a heat wave, and I think it's going to be 74 degrees or something like that. So terrible. I'll take it. I'll take it.
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A
That's a. That's a good exchange rate. All right. So, Nathan, what are you watching for in the second half of the year? I know we got the midterm elections. What are you thinking about those? There's, like, crypto legislation that's been brewing seemingly forever at this point. Some deregulation. Yeah. What are you watching?
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C
So let's start on the congressional front. And what I was thinking about is I was trying to think of how to frame my answer to this. I just wanted to go month by month. So Obviously today is July 2nd. What are we going to see in the rest of July? Well, there's really two things. One is President Trump has to sign or he doesn't have to sign this housing bill. This is the bill that Congress passed. It was bipartisan, overwhelmingly bipartisan, incrementally good for home builders, but, you know, really not much of a short term impact. But President Trump has refused to sign because of the Save America act, is his insistence that Congress passed the Save America act, which is its citizenship voting issues. So President Trump has 10 days from when Speaker Johnson sent it to the president, and he sent it on Monday. So he has until the middle of next week to either sign the bill, veto the bill, or do nothing. And if he does nothing, the bill automatically becomes law. Speaker Johnson has been telling aides that he thinks that President Trump is going to let it become law. Politico even reported that Speaker Johnson informed the White House that they would probably overturn it via overturn a veto. That's how badly the Republicans want to get this affordability message going into the midterms. So I think this bill becomes law on the Clarity Act. The Senate comes back on July 13, and they have approximately eight days to figure out how to pass this Clarity Act. And I've Always been saying that I think it's going to pass. I think it's going to pass. But then yesterday we had the bombshell report that the Trump family had made over a billion dollars. We're going to related to its crypto platforms and its crypto involvement. And that is pushing a lot of Democrats to say, you know what, we need to strengthen the ethics language about this. The Republicans will come back and say, look, I can't do anything. We already have strong ethics language in there. But you can't prevent the president's sons from being involved in crypto when they are not part of the government. And I just beginning to get the sense of things are beginning to look not so good now. I'm not changing my odds today. So today's July 2nd. I'm not changing my odds today. But give me a call or IB me when we get back from the 4th of July holiday because there is supposed to be legislative text released over the weekend. Maybe this bleeds into next week. There's really no deadline here. The staffers are the ones working on it. The Congress folks aren't. So we'll see. But again, we'll have to stay tuned for that on July 13th.
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A
Is the text they're working on specifically related to like anti corruption measures?
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C
Correct. So essentially the two big holdups right now are ethics language and, and then liability protection for developers. Up until yesterday, liability for protection for developers was the one that they were all really working on at the moment. The expectation here was that they were going to figure out ethics at the end of the like the last thing they were going to do was ethics because they thought it was going to be the easiest. But now that that report came out, it's not going to be so easy. As originally anticipated in August, Congress is out in recess. September, there's four things to keep them Tough life. Tough life, Exactly. Oh, it gets tougher. Just wait. I mean, just wait. In September, there are four things to keep your eyes on. The first is the government shutdown. The Republicans are making a little bit of a noise at the moment saying that there could be one. I don't think there's going to be a government shutdown. So just keep that in mind. Nobody likes government shutdowns right before an election. Watch for the highway bill. This is a $585 billion infrastructure package that goes on top of the $1.2 trillion infrastructure investment jobs act that expires this year. And so this would be 585 billion put on top of that for the next five years. Long story short on this one is that it favors those concrete makers, those heavy infrastructure companies, rather than electric vehicles. So you're talking like Marietta, Vulcan, Crh. But I just think they're going to run out of time. I think they're going to have to kick the can and they're going to have to do the bill work either during the lame duck session or next year. Not because they're really fundamentally opposed. It's just they're going to run out of time. Same thing for the farm bill. There is this farm bill out there that has to be done by September 30th. Keep in mind, though, that this is not your usual farm bill. So normal farm bills come through and they include funding for SNAP benefits, formerly known as food stamps. And that drives a lot of spending at your grocery stores, like your Walmart, your albertsons, your Kroger's, etc. Now, the one big beautiful bill actually funded SNAP benefits and pushed a lot of the funding onto the states. And so as a result, that is not included in this farm bill debate. So when you look at the farm bill, just note there are some smaller issues in here for, like crop reference programs and reference prices for specific, specific crop prices. That's important, but they're not going to get it done, I don't think. By September 30th. I think they're going to have to kick the can on that one as well. And then finally, you have this Iran supplemental bill. Now, this is actually not a bill, it's a request. It's $87.8 billion in additional funding. Most of it is tied to the Department of Defense for the Iranian conflict. There is $11 billion in here for additional farm aid. 10 billion of that is for 27 specific crops. The rest of the 1.1 billion is actually earmarked for, mostly for the state of Florida for due to storm damage that they had last year. But what you need to know about the other part, which is this whole like 87 billion dol. Again, most of it for the Department of Defense, is that most of the policymakers right now, when they saw this request, they just said, okay, but I gotta see more. And even Republicans are saying that, like you have some Republicans are saying, look, it's imperative we got to get this through, et cetera. And some of the Democrats who are very, you know, friendly to the defense industry, they're not saying the exact same thing. They're just saying, okay, we're, we need to see more. So it'll be interesting to See if we see a little bit more when we get back in July. But this is more likely going to be a September, September debate. And because it's coming up right close to the appropriations, which is the government shutdown, I'm not exactly sure this thing's going to pass. So stay tuned on that. Then in October, they're out again. You know, they're out campaigning, and then they're here for November. And so the way that I would think about the elections is essentially this, is that if you get a scenario where the Republicans keep the House and the Senate, then you have another reconciliation. You actually have several more reconciliation bills where they can bypass the filibuster. So things like tax changes, Obamacare changes, tariffs, et cetera, all that comes back into play. Now, according to the prediction markets, the number one scenario is that the Democrats take the House and the Republicans keep the Senate. Now, if that happens, the most likely outcome of that is that the Democrats will slow walk a lot of legislation and then they will use the bully pulpit to start subpoenaing, start sending subpoenas to CEOs, and they'll start investigating companies for their involvement with the White House. A perfect example would be the FT article that just came out this morning where it was said that OpenAI is considering a 5% stake for the Trump administration. Well, next thing you know, OpenAI could get a subpoena from the House Oversight Committee under the control of the Democrats. And they'd say, we want to learn more about this. You know, and it's. Look, none of it's going to, I don't want to say none of it. It's not like it's an immediate link between this and saying there's bad behavior and you're going to get something. But, you know, none of these companies want to be in the crosshairs of either party. You know, it's just like mom and dad are fighting. I don't want either of them to
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A
get mad at me.
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C
I just want them to be happy. So that's the most likely scenario if the Democrats take the House. And if the Democrats take the Senate, well, then, you know, President Trump can't get his nominees through. So you're going to see essentially more acting chairs. You will not see a. You know, it means that if Jerome Powell decides to retire, it means Fed governors can't go through. It would essentially be controlled by the
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A
Democrats and courts, too. You can't. Won't be able to get judges through.
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C
Yep, exactly. So that's the number one outcome. If the Democrats take the Senate. So long story short is President Trump is still the president until January 20, 2029, and a lot of this goes through him. Real quickly. Just on the regulatory side, a couple of things to keep in mind is that the Fed has five and we're going to talk about financial regulation. Start when it comes to the banks. There are five proposals out there at the moment. There are two tied to stress testing, one's transparency and one's volatility. And then you have the Basel III endgame, you have the G Sib surcharge, and then you have the standardized advances of approach modeling proposal out there. Long story short is all of this will most likely return about $18 billion in capital to the G SIBs. Tack on 13 billion that we got from a final ESLR rule from last year. So you're talking 31 billion. All that should be finalized by the end of the year. The regulators really want to get that done by the end of the year. So what's the next phase for bank regulation? Well, there's really two rules that I'm hearing. One is regional bank thresholds. So the threshold that the size of a regional bank determines what type of regulation you fall under. It's called prudential standards. The current levels are 100, 250 billion and 700 billion. The $250 billion threshold is required by law. That's a statutory requirement. But the 100 and 700 billion can be altered by the Fed. I think you're going to see a proposal that alters this. And so if that's 700 billion per threshold, all of a sudden becomes 950 or a trillion. Well, if you're a bank like PNC or Capital One or Truist, that gives you several hundred billion dollars worth to either organically grow or inorganically grow and could potentially open up for more M and A opportunities. So watch for that proposal to come out. And then I'm hearing that there could be a liquidity coverage ratio proposal for the G Sibs coming out. I've actually been told it could be as soon as this month. I don't think that's going to be the case. I think it's going to be more likely the end of this year or the beginning of next year. One other financial regulatory piece I just want to talk about is prediction markets because it's getting a lot of press at the moment and the CFTC has an NPR meaning a notice of proposed rule out there on prediction markets. Now, in a normal world, I don't think CFTC would be able to finalize this this year. But the CFTC is moving fast. And what this proposal essentially does, it just reaffirms the CFTC's jurisdiction, clarifies a little bit of what's Regulation 4011 about contracts that can be considered or not? I mean, no, no event contracts tied to assassinations, terrorism, war clarifies a little bit of gambling, you know, so versus what is an event contract. But you know, if the CFTC finalizes it all, the most important thing to note is that yes, it does bring regulatory clarity to these platforms. But I would argue the most important thing that happens when the CFTC finalizes this rule is that it allows Elliot to start writing about it because the lawsuits are going to start coming after that.
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Well, actually I'm already covering so much litigation related to the prediction markets because for a year now we've had cases between the states and the various prediction markets like Calshi, Robinhood, Coinbase, Polymarket over whether the contracts that are traded on those platforms are, you know, should be considered derivatives or it should be considered gambling. But you're right, Nathan, once, once the CFTC finalizes its rule, there's going to be even more litigation because there's going to be APA challenges trying to strike down the rule. And at this point we sort of have a race between whether we're going to get clarity from the courts in the ongoing litigation or you know, we'll get clarity, clarity from the CFTC and then the courts again with respect to the rulemaking. But I'm going to talk about that litigation a little more in this podcast. So Nathan, what back to you to see what else you're watching.
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C
Yeah, so last two things is real quickly you are going to see more marijuana reschedulization news. The DEA has a hearing right now. It actually started on June 29th and it goes for several days. It's going to go through the fourth of July holiday. So you're going to start to see more hot sauce, as I call it, volatility within these stocks. Because as a reminder, they only rescheduled it from Schedule 1 to Schedule 3 for state licensed cannabis. Now they're actually going and broadening that out. So you're going to see additional marijuana and if you have any questions on that, please let me know. And actually one of the prior votes and verdicts episodes we just did with Marijuana Lawyer dives into that fairly in depth. And finally on the USMCA, you know, yesterday we saw the three countries, this is the US, Canada, Mexico, agreement, formerly known as NAFTA. They came together and they essentially stopped the 16 year agreement. Now, the United States is not pulling out, nor do we think it's going to withdraw. But what happened yesterday is that the United States decided to convert it to an annual review system. So this is essentially, you know, every year now, the United States, Canada and Mexico are going to have to negotiate over this type of stuff. And the talks are really going to focus on, like, strengthening what are known as the rules of origin, increasing market access in Canada, for example, for US Dairy products, strengthen anti forced labor provisions, which seems kind of, you know, a lot of interesting. A lot of people say, well, wait a minute, the United States is investigating all these countries for forced labor. Forced labor is a way that you can conduct this, what's known as a Section 301 tariff. So there's always going to be investigations related to that. And then, you know, increasing tariffs on goods that fail to satisfy the cordon tree of origin rule, meaning that if it comes from China into Mexico and then goes into the United States, should that be tariffs under the China rule or the Mexico rule? The one industry that's really susceptible to that just to keep an eye on, is vehicles and automobiles. So as we get into that, start paying attention a little bit more to the automobiles. But at the end of the day, you know, tariffs isn't something that President Trump really wants to highlight right now in advance of the elections. But, Elliot, when you and I were in Europe back in April or May, you know, our number one, for those of you who are listening, our number one message to those clients that we met with Europe was that tariffs are coming back. And when President Trump says tariffs are his favorite word in the English language, you know, he doesn't. He's not lying. He truly means it. So the day after the election, when President Trump has nothing to actually, you know, go forth with or be concerned about in terms of an electoral pushback, I think we're going to see a lot more tariffs next year. So again, a lot of those investigations are taking place right now.
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A
Got it. All right, Nathan, good stuff. Let's stay down in Washington and bring in Matt Suttonhelm. We'll switch from primarily the financial sector to tmt, tech, media and telecom. And we have our litigation and policy analyst covering that sector, Matt Shettenhell. Matt, how you doing?
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D
Good, Elliot. Thanks for having me.
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A
Yeah, Big plans for the 4th?
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D
Yeah. Gonna try to get down to Williamsburg for a couple days and enjoy it.
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Kick it old school. That's like very on brand for the holiday.
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D
Yes, yes.
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Yeah, Williamsburg is great. There's always so much going on in the TMT sector between AI you have these social media addiction lawsuits that you're following, ownership caps. I know you've written a lot about for broadcasters. What are you watching?
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D
Yeah, yeah. So kind of since we're going big picture, I thought I would do that. So sort of three different industries, all at sort of different stage in their development, but each of them sort of has an interesting component to watch in the second half of the year. AI sort of a, you know, the developing nascent industry, social media kind of in its mid. And then broadcasters sort of the old guy and each of them are impacted differently. So let's start. AI really interesting conversation starting to happen in Washington, D.C. about what do we do about regulating this industry. And you've seen developments just in June with the introduction of bipartisan bills that aim at a more comprehensive approach to federal regulation of artificial intelligence models. You saw the administration, the Trump administration, which has generally proposed a hands off approach to regulation, kind of go completely the other way and literally shut down models using export control laws. And so we kind of get to a really interesting place that I don't think it's going to be resolved in the second half of this year in terms of legislation passing. But I think the beat by beat of how this develops is going to be fascinating and it's going to play out, I think, over the next two to three years, most likely. In terms of what should federal regulation of this technology look like? The concern on one side is if we regulate too aggressively, are we driving companies away from the United States? On the other hand, are there real risks if we don't regulate at all? And the current Trump administration approach, with no laws on the books and sort of, okay, we know it when we see it and we're gonna shut it down when we're concerned, isn't real good for business certainty either. And so I think it's really gonna be fascinating to watch how this takes shape going forward. And in addition, Nathan Referen earlier, you know, headlines now about maybe OpenAI giving away stakes in its company to the federal government or to the American people in some way, maybe to curry favor and sort of discourage aggressive regulation going forward. So, AI generally we're going to be watching how this takes shape and start to kind of help our clients understand what parts of this are meaningful, which parts of it are noise, and taking a look at all that. But the one thing that I, I think that stands out right now is the June 4 discussion draft from bipartisan lawmakers in the House, J. O Bernoulti and Laurie Trahan. You know, it's a big, big discussion draft, you know, hundreds of pages, not going to be adopted anytime soon. But it's going to shape that debate going forward. And so we're going to see what sorts of pieces of that start to emerge as potential model for federal legislation. So that's sort of where I am on AI Big picture is looking at how that plays out. So shifting from that to social media, sort of the industry sort of in its midlife here. I think there is some developments on the Hill where they're trying to push kid legislation. I'm not sure that's going to get over the Hill. It's got a chance in the second half of the year, but none of it's all that disruptive to the companies. What is disruptive to a company like Meta is the litigation that the company faces in the second half of the year. And in particular, I'm focused on the, the, the litigation about teen addiction. And a number of these suits are consolidated in a federal court in, in the Northern District of California, and it's headed to trial on August 18th. And, and, and one of the, and this suits by state attorneys general, dozens of states attorneys general, all pooled together into a single suit, claiming that that Meta effectively has misled everyone about the safety of its product. And this is really important, I think, most significantly because of the civil penalties that these states are seeking. I think Kentucky came out, Kentucky, one of the smaller states involved here, and said, look, we. Civil penalty of $40 billion or, you know, so it's, it. Which is sort of absurd, but it shows you what's in play here. I mean, you know, the states
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C
have
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D
the at least theoretical authority to seek civil penalties per violation. And when these social media companies serve, you know, millions of users per violation, penalties add up to, you know, a serious threat. And. Go ahead.
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A
Oh, I was just gonna ask, is Meta the only defendant in that case?
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D
So this, this case pools three different categories of cases. Meta is the only defendant in this suit for the suits by the states. But there are also suits by school districts and by personal injury claimants. And Those bring in TikTok, Snap and Google as well.
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A
But they're not part of the August trial.
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D
Right. The August trial, the one that I'm really focused on now, really is a Meta risk because it's the only one targeted in this suit. A couple of those. The companies also face other suits by state attorneys generals Those are generally spread out across other courts, but they're not really on this same scale as what Meta faces in terms of state attorneys general suits. And to me, that's the most significant risk of those three categories of suits. So this trial is going to be split into two parts. The first part is, okay, did Meta do anything wrong? You know, did it mislead consumers about the safety of its product? So it's possible Meta tries to win that. If it wins that, you know, it doesn't have to worry about a remedy. So it's possible it plays hardball there. The real risk comes in phase two. If it loses that, then the judge gets into these questions of how much money would it owe as a remedy, both in terms of, as I said, civil penalty. Also, there's a claim of disgorgement that it took in profits that it should be giving back. And so that can potentially add up. And so to me, that risk of sort of staggering damages amounts is going to put a tremendous amount of pressure on Meta to settle these suits. I think it probably lands in the low single billion dollar rang. And so significance, for sure for Meta. I think the trial will start, As I said, August 18, assuming no settlement, it probably runs into September, and that's when we could see real action here. Again, assuming there's no settlement to make it all go away.
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A
So interesting. Is it a mix of red and blue states, or is it, I mean, you might say in Kentucky, but yeah, it is.
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D
I think this is a pretty good mix of states. And the judge has prioritized four states that are going to sort of shape the claims in this trial. But I think very quickly, after those four states claims are resolved, you can kind of, very quickly, you don't need to have a separate trial for all the, you know, dozens of other states. I think she can quickly adopt that ruling and apply it broadly so that it. And so, yeah, it's a red and blue pretty high stakes just in terms of the number of young users that are represented by these. I think it's 29 states that are currently involved in the litigation and then shifting to the broadcasters, US Broadcasters in the second half of this year. And this, we saw some really interesting developments in the first half of the year when the FCC took up NextStar's request to merge with Tegna and the license transfer there. The FCC sort of took a shortcut on that one and said, look, yeah, we have this rule that says no company can reach over 39% of U.S. households. The FCC said, well, that's okay, we'll just waive that rule. And they did it at the staff level. The FCC didn't even vote on it. They just said, we'll waive it, go for it. And they just put out a quick decision to let nexstar go ahead and take over Tegna's licenses. The problem for challengers of that is it's very hard to sue over staff action. And so we're sort of in court limbo there about whether the FCC can do that or not. They filed lawsuits. It's sort of just sitting at the D.C. circuit waiting for some action there. And in the meantime, the FCC said, okay, we'll actually vote on changing that rule. We'll do it the right way. The way that sort of makes sense legally is let's finish our rulemaking to get rid of that 39% cap or at least raise it significantly because Nexstar TechNet goes way beyond 39%. And so what we've seen signals from at the agency is that the FCC is going to move forward with a vote very likely in the second half of this year to abolish that cap or at least ease it significantly. And so I think we could be seeing, we don't think it will happen at the July 22 FCC meeting, but the one I'm watching is the August 6 meeting when you could see a vote on this. If so, July 15th is when that agenda will be announced. So kind of watch that. What all this will mean. Look, we know how that vote will go. The two Republicans at the FCC will vote to ease the cap. The one Democrat will oppose it. But what it will mean is this all goes to a court challenge. And so then there's no question that that court will have jurisdiction to take up this question, can the FCC ease this cap or not? And there's a real argument from opponents of this move that look, this is, this is a choice for Congress to make and the FCC can't do it itself. And really interesting legal arguments on both sides on that. Ultimately, I think the FCC can win this one, but I don't have a huge confidence in that. There are strong arguments on both sides and it might turn on which three judge panel gets picked to resolve this initially. That could play a huge role in this going forward. That's the D.C. circumstances very likely will go to the D.C. circuit. Right now, the pending litigation in challenging the staff move is in the D.C. circuit. So I would suspect that this will end up in the same place.
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A
And then you expect it to go to the Supreme Court. After that, potentially, I guess it depends.
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D
Yeah, it wouldn't surprise me at all because, you know, it's a really fascinating legal question of whether Congress left the FCC discretion to do this or not. It has big stakes, not just for nextstar, Tegna, but for other broadcasters going forward that want to to consolidate and go way beyond 39% as well. So, yes, that would not surprise me one bit if after the D.C. circuit or the 1st Court of Appeals rules on this, this does go to the high court. So all of this gets teed off by the FCC vote on it, which I do think is coming soon.
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A
Great.
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D
Yep.
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A
All right. Anything else?
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D
That's where I am.
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A
All right. Well, that's plenty. So. All right, Matt, good stuff as always. Thank you. Have a great holiday weekend. All right, let's shift to antitrust and bring in our antitrust guru, Jen Re. Jen, how you doing?
- [32:45]
E
Good, Elliot. Thanks for having me.
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A
Good, good. Always a pleasure to have you here. So, Jen, I mean, there's always so much going on in the antitrust world. And our other antitrust colleague Justin Teresi is out today. So you'll discuss some of the cases he's watching, too. But I know you guys are watching monopolization cases against Live Nation and Google and probably others. You're, you know, your bread and butter is analyzing challenges to M and A deals. And I know you have the Paramount and Warner Brothers Discovery deal and some others. So get going. What are you watching?
- [33:21]
E
Yeah, so a lot in the second half of 2026, both deals and litigation. But and I was going to start by talking about Paramount, Warner Brothers Discovery, since everybody knows it. But I'm not going to because Matt just talked about nexstar, Tegna, the head fake. And so I thought it's fresh now because Matt was just discussing it. And I want to pick up on the antitrust side of it. He was discussing what was going on with the Federal Communications Commission, which has to review these kinds of deals because of the license transfers. But the DOJ is also reviewing for antitrust issues. And I think in this case, both agencies acted in what I'll call an unorthodox manner. So it is very interesting. So not just what Mat described with the fcc, but the doj, too. So on the antitrust side, we have, as I said, Department of Justice, and we have the States, and the Department of Justice has been really consistent for years about how it's assessed these kinds of deals to TV broadcasters. It's one industry where there's been a lot of merger activity over the last 20 years. And they've always, always prohibited them. And this is up to just a few years ago, Elliot prohibited them from merging their way into owning or operating more than one of the big four broadcast stations. So that means they get affiliated with abc, cbs, Fox or NBC. And the Department of Justice doesn't want them controlling more than two. Right. So what they would do is look at each local region and they'd require the companies to divest in any local region where this kind of overlap existed. So the deals can get closed, but they just have to divest these stations, which is sort of what I expected to happen here. And the reason for that is because these broadcasters will negotiate with the multi video distributors like a Comcast or Verizon or DirecTV that pay them fees to carry the stations operated or owned by these broadcasters. And when they have enough clout to have a couple of these big four stations that people want for sports and local news, they can raise those fees. And that's the reason. And nothing has happened to change that reasoning, to have the DOJ treat this deal differently. But it did and didn't explain why it completely and totally diverged. So the deal got signed in August of 2025. And what happened was a group of states sued to block the deal. Bipartisan, by the way, because the states can do exactly what the Department of Justice does. They have the right to sue to block a deal under federal laws. They sort of sit next to the DOJ in having that kind of of authority. And what happened is the state sued. And the very next day the deal got quick clearance from the Department of Justice and from the Federal Communications Commission. And literally an hour later the companies closed the deal in the face of that lawsuit. I should explain that the lawsuit was to keep the companies from being able to close the deal. So it all smells bad, right? And so what's happened is the states didn't have time to get a temporary restraining order to stop that closing because they literally closed within an hour. So they sought a preliminary injunction to stop the integration and they won that on April 17th. So right now Nexstar technically owns Tegna, but they have to operate completely independently and they can't integrate at all. They can't fire any employees, they can't close down anything. They have to have two HR departments, two legal departments. They can't do anything that merged firms would normally do. So the companies appeal that and they've asked for expedited treatment. The briefing will be done July 8th. Now we're still waiting on the court to hear whether they'll get expedited treatment. I do think they will, and I do think we'll probably get oral arguments and possibly even a decision in second half. So that's really big, right? Because if they reverse the preliminary injunction, the state suit is really not worthless because once the companies have integrated, it's very hard to get them to get a court order unwinding it. Now, in the meantime, we still have this lower court process on a permanent injunction or an unwinding that's not scheduled yet. But I also suspect we'll probably have a hearing in second half. And I should say that if the states win that, and I think they have a really good chance, I'm going to put it at 70, 80%, but I doubt, Elliot, it would be a full unwinding because I think what would happen is what should have happened to begin with, that these companies will have to divest in any local region where they overlap in those big four stations. And there are about 31 of those. So they still, Nexstar would still be able to acquire something like 35 stations of Tegna. So it's still worthwhile for them to do the deal, but I think that's where it might go. So we could have an answer in second half. Maybe it'll push into 2027.
- [37:55]
A
Lot of moving parts there.
- [37:57]
E
Yeah, a lot. So Paramount, Warner Brothers, same thing. We should hear some pretty monumental things about this deal in the second half. The big question is, is it going to be able to close this year? They signed in 1Q for $110 billion. The companies really want to close by the end of September, and that is because if they haven't on October 1st, they have to pay a ticking fee, as per their agreement, Paramount to shareholders of Warner Brothers of 25 cents per quarter, which is going to get up into the 6,700 million dollars in one quarter. I think they did that because there were concerns about antitrust. But I should say that the final end date of the merger agreement isn't until June 4th of 2027. So it's not technically going to fall apart just because this ticking fee kicks in. The deal has cleared antitrust in the US and a whole bunch of other jurisdictions, including China. But the companies are still waiting for clearances from the UK and from the eu. And also the deal is still under investigation by a group of states led by California. And it does seem to be the consensus that the states are going to sue, though Rob Bonta, the Attorney General of California, has been speaking a lot about it lately and has been very close lipped and secretive about it. I still think there's a possibility that a settlement could be reached between the states and the companies. That would ward off trial, but we'll see what happens. The states have to sue in the second half because probably the deal will get clearance by EU and UK in the second half and once they do, there's nothing that legally stops them from closing and integrating. So if the states want to sue, they're going to have to do that fairly soon and they're going to have to seek a temporary restraining order and or preliminary injunction. The EU, as a July 22 decision date, by the way, it looks very likely it's going to clear with concessions. Paramount has agreed to exit from a joint venture with Universal Pictures. I think there are other concessions too, but those have not been made public. But it looks like they're pretty aligned, so that's probably going to get cleared now. Some weird stuff is happening in the uk, though very brand new to me, is that the Culture Secretary, Lisa Nandy, has become involved. Now, I have to tell you, I had never heard of this Culture Secretary because that is not an antitrust agency. It is officially the Secretary of State for Culture, Media and Sport. And when I looked into this, I read that in the UK they call this position the Minister of Fun. Me too. So if you're going to have a government role, we may as well want to be the Minister of Fun.
- [40:23]
A
We should start a Department of Fun.
- [40:24]
E
I know we have a Department of War. We may as well have a Department of Fun. So apparently the Minister of Fun can intervene in a deal on public interest grounds. And in this case her concerns are about the need for sufficient plurality abuse in news in the UK and also also media ownership. But I did see more specifically that she was worried that the deal could potentially lead to a loss of presence in the limited market for children's linear content, meaning like children's TV stations. And we had predicted that, that there might need to be for either UK or eu, some divestiture of kids stations. I think the companies would do that. So I suspect they can get to an agreement there in the uk. They have to clear the CMA also, which is the UK's antitrust agency. I think the CMA could also ask for divestiture of children's stations and maybe some behavioral concessions. They have an August 7th deadline if no remedies are offered. But if remedies are offered, that moves to August 21st. So you see, we're Squeaking closer and closer to that, you know, to that end of September, because these deadlines can easily get pushed back. So, you know, I'm still watching to see if they push into that ticking fee time. Now, if California, as I said, and states sue, they're going to have to get a preliminary injunction. I think that they can because it's not that hard. The standards aren't that difficult in a merger situation to get that preliminary injunction. I am less confident that they can actually win some sort of a permanent block on the deal because, you know, it's a huge deal. But when push comes to shove, if you look at the overlaps, there really isn't any overlap area where the company's combined shares exceed 30% and they're actually well under in some, like in streaming hbo, Max Tax combined with Paramount Plus. So I think it's hard to say that this causes a concentration that's likely to result in some harm. Now, their best argument is probably harm to labor, particularly in California. But again, the one case where we saw that argument win, that was Penguin, Random House, Simon and Schuster. The combined shares of those companies were something like 52%. And here you're looking at combined studio shares of something like between 20 and 25%. So, you know, I don't even know if that would work. Right. So we're waiting on all of that. It's going to be a lot of activity in second half on that deal. So litigation, Live Nation. We all want to hear about that because none of us like buying expensive tickets and paying lots of fees. So this is another weird one with a little bit of unorthodox activity by the Department of Justice. The Department of Justice, with a whole bunch of states, most of the states in the country, to be honest. Honest. So bipartisan.
- [43:06]
A
Sued.
- [43:07]
E
This was back in 2024, I believe. I don't actually have the date that they filed that lawsuit, but within the first week of trial, the Department of Justice settled. And that settlement's been really criticized as being not particularly effective or good and influenced by lobbyists and folks at Live Nation that went to the administration to plead their case. But the states continued on, and they won a jury verdict April 15th. And Live Nation was found to have illegally monopolized primary ticketing services at major concert venues and also to have engaged in illegal bundling and tying for large amphitheaters, meaning that they required. They threatened to block artists from performing at any Live Nation venue. And live artists want those amphitheaters for summer concerts unless they use Live Nation as a promoter. So they tied the use of their amphitheaters to the use of their promotions arm, which is illegal when you have a monopoly on one side. And the court determined that, the jury determined that there was a monopoly for large amphitheaters. So there's a lot of activity. In second half. You have post trial motions that were filed by Live Nation seeking a new trial or to set aside that verdict to also exclude some testimony by an expert who was the basis for the overcharges for tickets that would form the basis for damages that would be awarded to the city states. Now, I don't think they have much of a chance of getting a new trial or setting aside the verdict. I think they have a shot though at dismissing the expert testimony and if they can do that, they'll greatly reduce damages. But the main thing the states are going for is a divestiture. So the damage is this sort of the secondary penalty. I think we're going to have probably hearings and a decision on those post trial motions in second half. So we'll see what happens there. Now also, the DOJ settlement has to go through what's called a Tunny act procedure. This means a judge has to evaluate the settlement and determine whether it's in the public interest. Now normally, Elliot, these just get signed. They're kind of pro forma. But, you know, in this case there are suspicious circumstances. So I think it's going to get a little bit more of a critical review. A lot of amicus briefs going in saying that the settlement's useless, that it was improperly influenced. So and the judge will have to decide this. By the way, in the second half, there's sort of a timing that that's imposed. The crazy thing about it is that if the judge rejects it, there's really not that much impact because the DOJ and the parties could agree to bolster the settlement or they could just do nothing because the judge can't force the DOJ to go back into litigation. You know, the DOJ could just drop their suit. And because judges don't review if there's no suit suit and the settlements dropped. So but I think that again, then maybe the judge would say, well, I have power over the remedies I'm going to impose due to the jury liability decision. So maybe this tuning act doesn't matter because it's going to be in addition to whatever I impose. So, you know, maybe the judge just approves it on that basis because that is the third thing that will be happening in second half. That they will start hearings on possible remedies. And as I said, the states are really seeking pretty significant divestitures of Ticketmaster and some set of large amphitheaters. I don't think that's the process will be a second half event. I think the decisions won't be until next year in the first quarter or the first half. So that's what we're watching in Live Nation. And the very last one is Justin's case, the Google Ad tech case, which has been pending for so long. This is in the rocket docket in the Eastern District of Virginia in front of Judge Leonie Brinkoma who's moved very quickly. Now we're waiting, waiting, waiting for this remedies decision from Hart that we've expected for months now. That is because the DOJ won a liability verdict in April of 2025 against Google for unlawfully monopolizing what's called the ad tech stack. So this is just software, digital advertising technology that websites use to sell advertising space and to sell ads. Right. And the judge decided that Google had engaged in unlawful exclusionary conduct and tying arrangements for its publisher ad servers, which is the software that publishers use to manage their ad inventory and ad exchanges, which is kind of the auction. It's the technology that automates the buying and selling of ads through real time auctions. And by kind of controlling this entire ad tech stack, Google could ensure its products were used from start to finish and it could extract fees all along the way. So the remedy space concluded in October of 2025 and I know that's only nine months and for most courts a decision wouldn't really be late, but the judge had suggested she would be issuing something in January. So given that, yeah, we're really late and we're waiting any day I have to think it's going to be in second half. I don't think she's going to let this go more than a year. The DoJ has sought structural remedies here too, including divestiture of Google's ad exchange and maybe parts of its publisher ad server. But we think it's more likely we're giving about a 60% chance that the remedies are only behavior and basically prevent that tying by Google of tying together its products, allowing publishers and advertisers to freely use any other software all along, any rival software all along that chain. So they can't say, well you know, your barred publisher from using our ad server unless you use our ad exchange. They can't do that. They have to let the Publisher use the ad server, but also use rival exchanges and probably also strict auction rules and other behavioral concessions related to non discriminatory routing through its ad tools and things like that. So this is what we expect to happen. But again, and we do expect to see this in the second half, but it is unpredictable because, as I said, we expected something in January.
- [48:53]
A
Yeah. I wonder what the holdup is.
- [48:55]
E
You know, I don't know. We did see that Judge Brincoma was. She did rule on a pretty big case that concerned the President. I am blanking right now on which one it was, but it was a pretty big one. I can't believe I'm blanking on it. So we know she was busy with that. That, and. And that might have taken her.
- [49:15]
A
Was it one of the prosecutions against, like, Comey or Letitia James?
- [49:18]
E
No, no, no, it wasn't a prosecution. Yeah. Sorry, I'm just pointing.
- [49:23]
A
It doesn't matter. But the point is she was probably busy on. She.
- [49:26]
E
She was really busy on it. Yeah, it was a big deal. I think it was probably taking her time. So when we saw she was on that case, we realized that could be part of the delay. And maybe now that she's ruled on that, this will push through in the second half.
- [49:37]
A
Y. All right, well, plenty of antitrust litigation catalysts to watch. All right, Jen, thank you so much. Have a great holiday weekend. I'm gonna just talk now quickly about three different things I'm watching. The first one is President Trump's efforts to remove Jerome Powell and Lisa Cook from the Federal Reserve just this week. Of course, the Supreme Court held that Lisa Cook could stay in her seat as a fed governor while she challenges Trump's attempt attempted termination of her back in August. But it was a pretty narrow ruling decided in Cook's favor because Trump didn't give her notice and an opportunity to respond to the accusations against her. So we think the President will continue to go after her in the second half of this year. He may try to fire her again, but to do so, he'd have to give her proper notice and an opportunity to respond. And indeed, shortly after the Supreme Court Court ruled on Monday, June 29, Trump posted on Truth Social something to the effect that he would continue to go after her. But even if he does, and even if he gives her the proper procedural opportunity to respond, we think she'll have strong defenses on the merits, sort of in dicta. The Supreme Court suggested that the for cause requirement in the Federal Reserve act requires some sort of unfitness for office and it can't be simply that the president is aiming to secure a friendlier replacement on the Federal Reserve. So I think given the apparent weakness of these mortgage fraud accusations against Lisa Cook so far, we think courts will likely find that there's insufficient evidence supporting the finding that Lisa Cook is unfit for office. And then similarly, we again expect Trump to probably continue going after Jerome Powell, who he's been critical of for many years. Now, you'll recall that the Justice Department closed its investigation into Powell related to renovations of the Federal Reserve building. But it did reserve the right to reopen that investigation later, depending on the findings of the Fed's inspector general, who continues to investigate these matters. So now we sort of think the Supreme Court's ruling in the Cook case leaves the door open for Trump to go after Powell and try to fire him still as well. But as with Coke, we don't think there's going to be enough evidence for a court to find that Powell is unfit for office. So on the merits, we think Powell, if he sues, if he gets, even if he gets fired, he would sue and he would likely win in court. The ramifications obviously are that, you know, these have short term implications for the composition of the Federal Reserve Board and then by extension the fomc, which sets monetary policy. And then long term these issues have implications for the overall independence of the Fed. The other, the second thing I want to talk about are prediction markets. Nathan and I were talking about this earlier. Like I said, there's just this onslaught, dozens of cases that are making their way through the courts now between companies like kalshi, Robinhood, Polymarket, Coinbase, crypto.com on the one hand and then states on the other hand, all concerning these companies ability to offer sports event contracts, states like Nevada, New Jersey, New York and many, many more argue that the contracts constitute unlicensed gambling and the states are trying to stop the contracts from being offered in their states. The companies argue on the other hand, that these contracts really should be treated as derivatives, they should be regulated by the cftc, and that states should be preempted from regulating them. So far we have a lot of court rulings, mostly at the trial court level. I'd say the majority of these rulings have gone in favor of the states, but a few have gone in favor of the prediction market operators. And the only decision that we have so far from a federal appeals court court went in favor of Calshi. That was the Third Circuit which ruled against New Jersey and in favor of Coalshee. But we're also awaiting decisions from other federal appeals courts, including the 9th Circuit and the 4th Circuit. And also the Massachusetts Supreme Court heard arguments and were waiting for a decision there as well. Ultimately, it's inevitable that these cases are destined for the Supreme Court given the preemption issues involved and the conflict. Conflicting decisions so far. In that 3rd Circuit case I mentioned, New Jersey had until July 6th to file its petition with the Supreme Court. And I just saw an alert while we were recording earlier that New Jersey's asking for a two month extension to file its cert petition with the High Court. So we expect they'll get that and then they'll have to file their petition by September, which would sort of push back my previous timeline on this. We probably have written arguments then going into the first half of next year and I have to sort of game it all out. We could still maybe get a decision in the Supreme Court by this time next year, but the timing has been pushed back a little now based on these recent developments. Overall, I think the prediction market companies have the better arguments based on the text of the Commodity Exchange act, which contains a very broad definition of swaps, and it grants the CFTC and not the states exclusive jurisdiction over such contracts when they're traded on federally regulated contract markets. And then the third thing I just want to talk about is the French page bank BNP Paribas. They're involved in a 10 year old case brought by Sudanese refugees in the US who accuse BNP of financing the genocide in Sudan several years ago. In October, a jury awarded about $20 million to three bellwether plaintiffs. But there's potentially 20,000 other plaintiffs who were certified as a class, which means that, you know, if you just do the extrapolation, and this isn't exactly, this is not how it's going to work. But just to give an idea of the potential magnitude of BNP's liability, if you do the math, you get the damages that exceed $100 billion if all the cases went to trial and if they resulted in similar verdicts again, which we don't expect to happen, but it gives you an idea of the potential exposure. BNP is appealing the verdict. It filed its opening brief on May 22. Written arguments will go into September, and we expect a hearing in the second session Circuit in the fourth quarter of this year and then a ruling sometime next year. We think BNP's opening brief is strong, but we think plaintiffs will have equally strong counterarguments for almost every argument that BNP made. So to me It's a close call at best. And I think given the uncertainty for both sides, settlement is still the most likely outcome. Timing's a little uncertain as to when that might happen. The parties may want to gauge how the appeals court is leaning at oral arguments argument before settling. So those are the three cases I'm watching. But before we wrap up this episode, we had a couple colleagues on our team who couldn't make it today just due to vacation schedules. I just want to highlight some of the things they're watching. Holly Frome covers litigation and policy in the consumer and industrial sector for us. There's some very important and high profile class action product liability cases that she's watching. One involves the company buyer, which actually just had a Supreme Court ruling in its favor recently involving their roundup weed killer. They entered into a settlement and Holly's watching for final approval of that settlement. There was a hearing scheduled for July 9, but it's been pushed to August. And then she's also watching a class action involving baby formula against Reckitt's Mead Johnson unit. There was a trial there that began June 22 in St. Louis and Holly's expecting a verdict in July. This involves claims that the formula caused babies to get nec, which is necrotizing enterocolitis, which is an intestinal disease with terrible, lifelong consequences. So if you have questions about those, reach out to Holly Frome. And then our tax analyst Andrew Silverman is watching several things. If you have any tax related questions, he's your guy. He's looking at things like Illinois's digital tax, which will be the subject of a lawsuit that will play out in 2H. He's watching the impact of the midterms. He's looking at cases, tax cases involving companies like Meta and Coca Cola and then just a whole lot of of other tax issues. Again, Andrew Silverman is your tax guy. If you have questions related to any litigation or policy that involves tax issues. All right. With that, I think we're going to wrap up this episode of Votes and Verdicts. As always, thank you for listening. I want to wish all our listeners in the U.S. a very happy Fourth of July holiday. We really appreciate you listening and we appreciate your continued support. If you have any questions about any of the matters we discussed on this episode, please don't hesitate to reach out.
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C
Out.
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A
As a reminder, you can find all of our research on the Bloomberg terminal at BI Go, our litigation and policy dashboard on the terminal you can find at bilawsgo. And we want to thank our producers, Aditya Somani and Mariam Traore, without whom this this podcast would really never publish. Thank you again for listening. Have a great day and we'll see you in the second half of the year.
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