Monopoly Round-Up: Paramount-WB Isn’t Just a Loss, It’s a Prelude
Before getting to the full round-up, I want to make an announcement. I am going on paternity leave, and handing over the site to Lee Hepner, an antitrust lawyer and a colleague of mine who has written for BIG many times. Lee is brilliant and an expert on surveillance pricing. He also has a lot of experience in California politics. This will be my last round-up essay for awhile, but you are in good hands as we head into an election season.
Ok, this past week was a doozy. On the good news front, the polling for the midterms looks better and better for Team Anti-Monopoly. On the bad news front, well, everything else. The new comically corrupt Antitrust chief, Adam Candeub, was advanced out of the Judiciary Committee and Apple is sending its app store antitrust case to the Supreme Court for the third time.
The most important news is that Paramount and Warner Bros. overcame the key hurdle to closing their deal, when California Attorney General Rob Bonta and 11 Democratic state attorneys general dropped their opposition, which I discussed on Monday in detail. It isnβt quite done, the judge hasnβt agreed to approve the consent decree, and there are amicus briefs and a well-received letter from Senator Cory Booker that the judge will hear arguments about. But itβs hard to imagine this one being paused for legal reasons.
Itβs easy to see this merger fight as a catastrophic loss, which it is. It will combine two of the five major movie studios, CNN and CBS, and major streaming platforms under the control of a highly politically connected owner of Oracle and TikTok. Iconic TV writer Mike Schur basically said itβs game over for Hollywood, and the American news media will likely become more corrupt, feckless, and aligned with capital.
But the merger challenge is also more than that, and it has implications beyond the castle walls of media, as important as those are. This fight was a battle between coalitions, and in some ways, it is a prelude to more of that fight in this election cycle and beyond.
David Ellison, son of Oracle billionaire Larry Ellison, wasnβt alone in his empire-building ambitions. It takes a village to centralize media. Wall Street was fully on board, as was the defense bar. In August, JP Morgan CEO Jamie Dimon said that the state challenge to the Paramount-Warner merger has the potential to βdeeply damage our capital markets, our dynamic system.β Donald Trump pushed the deal, but so did Democrat Ari Emanuel, brother of Rahm Emanuel. So did Tom Cruise. So did the Directorβs Guild and the International Alliance of Theatrical Stage Employees. So did California Governor Gavin Newsom, LA Mayor Karen Bass, incoming Governor Xavier Becerra, and much of the state legislature.
The other group were populists on the left, the anti-monopoly world, artists, the Writerβs Guild of America East and West, and the public itself. What they lacked in money and organization they made up for in grassroots support. Most voters do not think the deal will be good, and Californians supported challenging the merger 49-30. This fight was a line in the sand for the masters of the universe, who have been fighting against a pushback on AI data centers, and a billionaire tax, and before that, Lina Khanβs attempt to revive antitrust law.
We learned two important things in this battle. The first is what happens when an elected leader tries to say no to an oligarch after 45 years of unfettered rule by capital. That is, they get extremely angry and vicious. As G.K. Chesterton once said, βThe poor have sometimes objected to being governed badly; the rich have always objected to being governed at all.β
Ellison threatened the entire state of California with moving Paramount out of the state, his legal team said theyβd destroy antitrust law by appealing to a Supreme Court whose members they know personally, his allies controlled most of the media narrative about the case, and he engaged in an extreme version of corruption vis-a-vis the President.
What does that mean going forward? Well, if the Democrats do win, and they do try to impose even modest limits on capital, then they will face the same level of pushback. If they, say, try to stop health conglomerates from denying needed care, health insurers will simply say, in one way or another, βwell if you do that weβll be forced to kill a bunch of people.β If they try to cap hospital CEO salaries, itβll be, βtoo bad the poor have nowhere to give birth now.β If they attempt any limits on defense contractors, well, βsucks that U.S. soldiers wonβt have the parts they need to detect incoming missiles.β If they try to subject big tech CEOs to the rule of law, itβll be βtoo bad those rogue AI systems are gonna be a little more rogue.β And so on and so forth.
Oligarchs will have massively well-funded legal teams explaining why all of that is not only legal but absolutely necessary, and they will file in districts in Texas or Mississippi where they will find favorable judges to take their side. At every moment, the press will adopt a βboth sidesβ attitude, making it extremely hard to tell a story about what they are trying to do.
The second level is about the Democrats, which is a political party few people really understand. The most important thing to get about the older generation of Democrats is they are fundamentally uninterested in the real world. They have a form of politics, but it is unrelated to governing. It is about validating each other as savvy and polite, while deferring to objective experts. Thatβs why they love βindependentβ agencies and asking for studies and vague regulations.
And thatβs why this merger challenge was so important.
When California Attorney General Rob Bonta took a stand against this merger, it was stark, a real position on an important question of market and media structure. He was playing in the big leagues, where Wall Street plays. When he reversed himself completely on this merger, he met widespread disbelief from virtually everyone, from opponents of the deal to supporters of it. And thatβs not because he caved, but because he had talked so tough and then flipped without any explanation. There were many people musing about whether he had been blackmailed, or bribed, and whether this move was the biggest betrayal anyone had ever seen.
But I donβt think any of those are why he flipped. I think he flipped because he assumed no one would care. And thatβs because all of the insiders around him likely told him serious people would let this merger through, and any controversy would blow over in a few days. The entire state Democratic establishment was pressing him to let the merger through, and he doesnβt notice anyone but them.
Think about it differently: Bonta could have simply said, βwell Iβm not willing to risk the economic viability of Los Angeles and the Federal government needs to step in,β or any other number of excuses. That would have split the opposition and rescued his reputation. But he didnβt. He just let the deal through, then insisted he cured the market power, which was comically embarrassing. It was just weird to see such a brazenly dishonest loser.
What most donβt realize is what was unusual about this situation, and it wasnβt the betrayal itself. Most Democrats do this kind of reversal, and have for many decades. A famous quote from former New York Governor Mario Cuomo, who was once revered as a liberal icon in the 1980s, was, βYou campaign in poetry and govern in prose.β While beautifully phrased, that is simply a naked and cynical argument for lying. That is just how neoliberal Democrats operate. The only thing they care about is what other insiders think of them as they run empty campaigns and sit in plush offices. Itβs a form of courtier politics, where understanding the real world is irrelevant, and what matters is how the insiders perceive you at court. So Bonta didnβt need to be bribed, or cajoled. He was just doing what Democrats elected prior to 2024 do.
Most neoliberal Democrats are like actors playing doctors on TV. Asking a neoliberal Democrat to do something about corporate power or economics is like asking a TV doctor to do surgery. Itβs not just that they wonβt do it, they are baffled anyone would even consider that their job. A different analogy is the film Galaxy Quest, a sci fi adventure about a group of actors from a Star Trek style show. They are pulled into a battle among aliens, one faction of whom thinks the show is a documentary of a real civilization and has built their society around the fictional series. At a certain point, the lead has to tell the aliens who have worshiped him that he is in fact just an actor.
What Bonta did here is just that.
In other words, it wasnβt the betrayal that was unique, it was that everyone noticed it. Barack Obama ran on fixing the foreclosure crisis and talking tough on Wall Street, he even beat Hillary Clinton in Iowa by promising antitrust action against meatpackers and Monsanto. Then he did the opposite, which was a much bigger reversal than Bontaβs. Donβt take my word for it, Reed Hundt, the insider who introduced Hillary Clinton and Barack Obama, wrote the definitive account in A Crisis Wasted.
The difference between Bonta and Obama is that Obama was able to persuade Democrats that he was doing the best he could, and so most of them thought, βwell, he tried, thatβs just capitalism/racism/America.β As a result, it was impossible to build a coherent left politics on populism for ten years. And even now, large factions imagine that thereβs a structural explanation but cannot fathom what actually happened, which was a set of choices by Obama. But years ago, Democrats realized they had to actually explain themselves when they betrayed. They had to lie. Now the blood has gone thin in these last generations of neoliberalism. These guys are dumb club members. So with Bonta, it was just a straightforward and obvious lie, this time in the spotlight.
Now, Iβve been careful to say that itβs an older generation of Democrats who cosplay as substantive. One reason Lina Khan has a different valence is because, to continue the analogy, she isnβt an actor playing a doctor. Sheβs a surgeon, and it was shocking, confusing, exhilarating, and scary all at once to see someone in policy actually playing with the big boys in a real way.
This cycle is going to see a bunch of new people elected. Last year is when New York Mayor Zohran Mamdani won, and he definitely is perceived to have a different approach. How different is an important question. Abdul El-Sayed, who is probably the most important figure, is quite smart. We interviewed him for Organized Money. Melat Kiros and Angie Nixon both prevailed on campaigns that promised to break up big medicine and take on corporate concentration. So did Aisha Wahab in California. In Arkansas, Hallie Schoffner is campaigning against corporate concentration of farming. There will be more of this.
They may show a different form of politics, taking the side of the anti-Ellison coalition, as it were. The point, though, is that what we just saw is not just a battle we lost. It is a prelude of the kind of tactics and coalitions to come. Right now, itβs clear that billionaires donβt have to follow the law. Itβs also clear there is now a serious challenge to that framework. It wasnβt quite powerful enough to block the merger. But now we know how they are going to play the game, and they arenβt going to be nice about it.
And now, the rest of the round-up. There are a bunch of important stories. For instance, cities are taking on surveillance pricing, teenage hackers are extorting the FBI, and bond yields are way up, which means Wall Street is saying thereβs not enough global cash for all the data centers and wars. Oh, and it came out that Metaβs legal team actually made hats bragging about how they lie to the courts. All that after the paywall.
