US approval of Paramount/Warner Bros. deal surprised DOJ lawyers, report says

The recent endorsement by the U.S. Department of Justice for Paramount Skydance's acquisition of Warner Bros. Discovery has stirred significant controversy. Announced on Friday, the DOJ stated that a thorough eight-month investigation by the Antitrust Division concluded the $111 billion merger would not negatively impact competition or U.S. consumers. However, reports from The Wall Street Journal reveal that the career attorneys within the DOJ were initially inclined to recommend legal action against the merger, citing concerns over its potentially anticompetitive nature. According to insiders, the investigation was curtailed by senior DOJ officials before these attorneys could formally present their objections. In reaction to the revelations, Senator Elizabeth Warren (D-Mass.) expressed skepticism, suggesting that the merger might have been approved for political reasons, stating, "This reeks of corruption." The staff investigators had not finalized their recommendation, yet they questioned the feasibility of the merged entity’s commitment to delivering 30 theatrical releases annually, particularly in light of its substantial debt. Even if the staff had pushed for a formal challenge to the merger, DOJ leadership had the authority to dismiss that recommendation and proceed with the approval. Senior officials believed that Paramount's debt should not be a factor in opposing the merger. Notably, Federal Communications Commission Chairman Brendan Carr had previously shown support for the deal, despite the requirement for an FCC waiver due to significant equity stakes from sovereign wealth funds in Saudi Arabia, the United Arab Emirates, and Qatar.