Bonta makes his case
TGIF! Hungry for a “truth sandwich” today? Then scroll down…
Lawyers for the 12-state coalition trying to block the Paramount–Warner Bros. Discovery deal will be in court today arguing that a temporary restraining order (TRO) is necessary to stop the companies from completing the merger.
Judge Araceli Martínez-Olguín will also hear Paramount’s arguments against the TRO. As I reported earlier this week, the companies expect the judge to issue a TRO, effectively pausing the merger for a couple of weeks while the legal process plays out.
Ahead of today’s 1 p.m. ET hearing, I interviewed California Attorney General Rob Bonta, who is leading the coalition of Democratic AGs against Paramount. Bonta also said he is “hopeful” a TRO will be granted today, “but it could take a few more days too.”
It was clear that Bonta wanted to address the widespread talk about CNN, the ticking fee, and the notion of Paramount moving out of California. He said some of his opponents are “trying to take things out of context and create confusion.”
But “our complaint couldn’t be clearer,” he said. Here are lightly edited excerpts from the conversation:
>> Are there any negotiations taking place with Paramount about a possible settlement?
“There are no negotiations. We are suing. We are in litigation. We have sued and sought a TRO and a preliminary injunction seeking to block the merger. That’s it. That’s full stop. That’s where we’re at.
“Of course, if Paramount–Warner Bros. want to come forward in good faith and sincerely want to make a settlement offer, we’ll always consider a settlement offer. And it would have to include structural remedies. We’re not interested in behavioral remedies — empty promises, self-serving promises, promises that are unenforceable, that won’t be kept, that history shows won’t be kept. So we’ll consider what they propose, but they haven’t proposed anything.”
>> You said structural remedies, plural. Is there a significance to that?
“Yeah, I don’t see how one single structural remedy [would be sufficient], unless that structural remedy is the two companies don’t merge, which is what we’re seeking.”
In the news media, there’s been speculation about one specific structural remedy: A spin-off of CNN. If Paramount came to you and offered only to divest CNN, would that be sufficient? Would that end the lawsuit?
“Absolutely, 1,000%, no. Not yesterday, not today, not tomorrow. Hell no.”
>> Why not?
“It’s not adequate to address the concerns we set forth in our complaint.
“Brendan Carr wants to talk about it, news outlets want to talk about it, and there are some attempts to try to suggest that the source is from me or from someone close to me, but I’ve never said that. I’ve never thought that. I will never think that or say that.
“I’ll say what is actually true: A divestiture of CNN, a spinoff of CNN, a structural remedy that just applies to CNN will never, ever, ever, ever, ever resolve this case. It is not what we’re looking for. It’s not what we’re interested in. It doesn’t address our concerns.
“If they want to come forward with some sort of structural remedy package that includes CNN being rolled off, we’ll consider that. But that’s not what we’re looking for. It’s not what we’re interested in. It’s not what we’re focused on. We’re focused on what the complaint says we’re focused on — the wide-release theatrical film market, the blockbuster theatrical release market, the cable channel market.
“But it’s part of this Paramount PR campaign that’s in overdrive. I think they’re trying to play to the court of public opinion. They’re suggesting that, instead of the very clear, clean antitrust analysis that we’ve done here — where I’m sure they’re on their heels because the merger in the three markets we identify is presumptively unlawful — they’re trying to say, ‘Hey, this is just political. This is a Democrat AG, and Democrat AGs just want CNN to be free of the influence of the Ellisons.’ And it’s ridiculous. I mean, that’s not part of our complaint. It’s not adjacent to our complaint. It’s not part of our complaint.”
>> Am I right that you would like to avoid an outcome where Paramount owns CNN, but that would not be sufficient to resolve this suit? Am I characterizing that correctly?
“We’re just not seeking it. It’s not the focus of our complaint. If they want to do that, I value it at more than zero. But it is very far from being close, even in the ballpark, of being sufficient. It doesn’t even touch the three markets that we’re talking about.
“So if they want to include it, we’ll consider it. But it’s not something that we’re looking for, seeking, pushing for. We’re pushing for what the complaint says we’re pushing for. We’re seeking to block the merger.”
>> When Paramount says that you are defining the three markets far too narrowly, what will you say in response?
“I think we define the market very precisely, and I think they don’t like it because the analysis shows what we know to be true, which is that this is a presumptively unlawful merger because of the market concentration in those three markets.”
>> Aren’t you litigating about the past – movie theaters, cable — when we all know the present and the future is streaming?
“It’s not really about past, present or future. The law is indifferent to where markets are going, are they shrinking, are they growing. Millions of people across this country spend hundreds of millions of dollars every year at movie theaters, and that is a market. So are the licensing agreements that owners of cable channels have with cable companies. That’s how Comcast and Cox and AT&T and satellite companies, DirecTV and Dish Network, that’s how they are able to provide basic cable TV channels in their offerings.
“There’s no doubt those are markets. They’re multimillion-dollar markets, and this merger impacts them in a way that’s illegal.”
>> What about the ticking fee that goes into effect in October?
“That is a choice that Paramount made. They agreed to it as a party with Warner Bros. They might regret it, but they absolutely knew that this proposed merger was going to have to go through a regulatory process, and that that would take time.
“Now they’re trying to somehow say that it’s our fault or that we have to pay for it or that taxpayers have to pay for it. And it’s perplexing. It’s a very perplexing suggestion that the thing that they agreed to, we need to pay. I think the party that agreed to it has to pay it, pretty clearly.
“Paramount planned for the antitrust review to extend to June 2027 — that’s in the contract. Starting the ticking fee earlier may have been ill-advised for them, but it was their choice. They could have said no. They could have agreed to something else. But they’ve made their bed, and now they have to lie in it.”
>> The news stories about Paramount potentially moving out of California: Are you taking those seriously?
“It smacks of what a monopolist would do, and it seems like a desperate last-ditch effort to try to leverage, bully, blackmail me and the other states from bringing a lawsuit.
“I think they were trying to threaten us. So, their gambit, their threat, their attempt to blackmail obviously didn’t work, won’t work, and will never work.”
I have reached out to Paramount and WBD to request an attorney interview that can run in this space.
Judge Martínez-Olguín had already been assigned to the consumer lawsuit against Paramount–WBD when the state AG lawsuit came along. Legal analysts had expressed skepticism about the consumer suit’s chances, and that assessment was borne out yesterday when the judge rejected the plaintiffs’ push for a preliminary injunction.
I brought it up to Bonta, and he said, “We don’t think that case really advanced a lot of the evidence at all. Our case is very different, so we don’t think there’s any impact. It’s not any indication of where our case might go, either.”
ICYMI, I filed this analysis piece for CNN.com about how the TV networks handled Trump’s highly unusual prime-time address last night.
Most of the networks tried a “truth sandwich” approach. I coined that phrase back in 2018, inspired by the linguist George Lakoff, who told me on a Reliable Sources podcast taping that journalists are trained to “repeat and quote what public figures say, but when the public figures are distorting, lying, and trying to reframe things in an utterly false way, what the journalists are doing is helping them. Reporters who simply amplify everything Trump says are part of the problem.”
So, Lakoff said, to avoid being manipulated by Trump’s lies, “start with the truth that he’s trying to hide.” Then relay the lie. “And go back to the truth.”
“It’s a truth sandwich!” I said. Lakoff chuckled. “You’ve got it. A truth sandwich. Perfect way to image it.”
The phrase took off. “What we need right now is a big, juicy ‘truth sandwich,’” Margaret Sullivan wrote in advance of Trump’s speech.
And that’s basically what was served up. NBC, ABC and CNN monitored the speech and reported on what Trump said, in context, without taking it live. CBS started an hourlong special report by prebunking Trump, with anchor Tony Dokoupil warning that “much of what the president has said on this topic is false.” Then CBS dipped into the address late and cut away a couple of minutes early, right when he attacked NBC and ABC.
The rest of the CBS hour provided context from election experts, several of whom pushed back hard on Trump’s depictions. Democratic Sen. Mark Warner criticized CBS on CBS.
Perhaps the biggest tell was that Fox News aired the speech, on both cable and broadcast, but moved on quickly. This morning, Fox is barely talking about Trump’s obsession at all…
A federal appeals court handed the Pentagon a win in its effort to restrict press access last night, WaPo’s Scott Nover reports. A three-judge DC Circuit panel ruled that the department’s requirement that journalists be escorted inside the Pentagon can remain in effect, overturning a lower court ruling that called the policy a “perverse reading of the First Amendment.”
The New York Times, which sued over press restrictions, said it was “disappointed in the interim ruling” but will continue to fight the policy “on the merits.”
Madison Square Garden filed a defamation lawsuit against Wired yesterday over a July 9 article from Noah Shachtman and Maddy Varner alleging the NYC arena used surveillance tools and “tracked and categorized hundreds of celebs, famous Knicks superfans, and even some of Taylor Swift’s wedding guests.” The company reportedly assigned labels to guests, including “LGBTQIA,” “DO NOT HOST” and low or high “risk.”
MSG claims Wired’s reporting was “unethical and inflammatory,” used “stolen” data, and “cherry-picked fragments of that data to manufacture a false narrative portraying MSG as targeting the LGBTQIA community for discriminatory purposes.”
Wired responded in a statement: “We stand by this reporting, and plan to vigorously defend it against this baseless and ridiculous lawsuit. We look forward to continuing our coverage of MSG, and on billionaire James Dolan’s use of technology across his entertainment empire.”
“Two Utah nonprofits and their founders sued Fox News and celebrity investor Kevin O’Leary on Wednesday, alleging they were defamed when O’Leary repeatedly claimed on the network that they were operating on behalf of the Chinese Communist Party,” Politico’s Hassan Ali Kanu reports.
Fox News Media said it has “publicly corrected the record on every program where on-air guest Kevin O’Leary’s comments were made” and will “vigorously defend against this lawsuit.”
This morning, Craig Melvin spoke on the “Today” show about yesterday’s scary incident at Studio 1A. “You may have heard that, unfortunately, an intruder made his way into an unauthorized area here at Studio 1A,” Melvin said on the show. “Thankfully, he was apprehended quickly. He was placed under arrest. We are cooperating fully with the NYPD as they investigate the matter. And we are just very happy that everyone is safe.”
CNN’s Mark Morales recapped what happened here…
Netflix shares fell more than 10% this morning to a new 52-week low “as investors appeared disappointed once again in the company’s earnings forecast,” CNBC’s Lillian Rizzo wrote.
“The company said its engagement is ‘healthy’ following recent reports of a slowdown for the metric,” she wrote, “but it also said it would cut back on the frequency of its ‘What We Watched’ reports, which provide a picture of engagement.”
This edition of Reliable Sources was edited by Andrew Kirell and produced with Liam Reilly. Email us your feedback and tips here.