FCC's Brendan Carr Reportedly Questions Antitrust Basis For Paramount, Says Disney Under Heightened Scrutiny

• Carr questioned the strength of potential antitrust concerns involving Paramount, while the FCC continues reviewing foreign investment aspects. 
• Paramount rejected a 12-state lawsuit challenging the $110 billion deal.
• Carr said the FCC is reviewing Disney’s DEI practices, broadcast license renewals and ABC’s “The View.”

Federal Communications Commission (FCC) Chairman Brendan Carr weighed in on the proposed Paramount Skydance (PSKY) and Warner Bros. Discovery (WBD) merger and outlined the agency’s ongoing scrutiny of Walt Disney Co. (DIS), including reviews tied to its DEI initiatives, broadcast license renewals, and programming standards. 

Antitrust And Paramount-Warner Bros. Merger 

Speaking during a Bloomberg interview,  Carr addressed speculation surrounding potential antitrust concerns involving Paramount, saying “it's hard to see a real legitimate antitrust action”, while emphasizing that competition issues ultimately fall under the jurisdiction of antitrust authorities.

“I did think it was interesting that there was a statement at least attributed to the California Attorney General that said that they would not sue if Paramount agreed to spin off CNN”, said Carr. 

Carr said it was difficult to see how antitrust rules could justify making ownership of CNN a deciding factor in evaluating the broader media group.

On Monday, Paramount Skydance rejected a lawsuit by 12 states seeking to block its $110 billion acquisition of Warner Bros. Discovery, arguing that stopping the merger would limit investment in entertainment, hurt Hollywood workers and protect major streaming rivals like Netflix (NFLX). 

The states, led by California Attorney General Rob Bonta, said the deal violates antitrust laws by cutting competition, possibly increasing prices and weakening consumer choice. While the U.S. Department of Justice has approved the transaction, the lawsuit could delay the merger. 

Carr added that the FCC remains responsible for reviewing aspects of foreign investment connected to the transaction. He said the commission is conducting its standard evaluation process and has not yet reached a final determination.

Paramount Skydance stock edged 0.6% higher overnight on Monday. On Stocktwits, retail sentiment around the stock improved to ‘extremely bullish’ from ‘bullish’ territory the previous day. 

Disney Faces Multiple FCC Proceedings

Carr said the FCC currently has three separate matters involving Disney. One centers on concerns first raised in March last year regarding the company's diversity, equity and inclusion (DEI) initiatives. 

According to Carr, the commission is investigating whether employment practices may have resulted in discrimination involving compensation or workplace opportunities.

“Frankly, the view was that Disney was being disingenuous in the way it was responding to the FCC's inquiries,” Carr said. 

As a result, the commission required an early review of the company's broadcast license renewals. Carr said Disney must now demonstrate that its stations have served the public interest while the FCC evaluates petitions opposing the renewals.

In addition to the employment-related inquiry, Carr said the commission continues to review issues involving ABC's "The View," including questions about its status as a bona fide news program.

Walt Disney stock inched 0.02% lower overnight on Monday. Retail sentiment around the stock remained in ‘bullish’ territory.

So far this year, WBD, DIS, and PSKY stocks declined between 6% and 28%. 

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