WEBVTT - California Attorney General Rob Bonta Talks Warner Bros./Paramount

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<v Speaker 1>Bloomberg Audio, Studios, podcasts, radio news.

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<v Speaker 2>It's balance of power on Bloomberg TV and Radio. I'm

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<v Speaker 2>Joe Matthew. Thanks for joining us on the Friday edition.

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<v Speaker 2>After a month long battle for Warner Brothers, Paramount has

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<v Speaker 2>officially outbid Netflix by agreeing to pay one hundred eleven

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<v Speaker 2>billion dollars for the Hollywood studio and paying Netflix for

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<v Speaker 2>the two point eight billion dollar breakup feed It terminate

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<v Speaker 2>its initial merger agreement just a short time ago. The

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<v Speaker 2>merger raising concerns about market consolidation, of course, job losses.

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<v Speaker 3>You've heard about it on Bloomberg.

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<v Speaker 2>It's still pending regulatory approval, with Paramount chief David Ellison

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<v Speaker 2>already asked to testify before Congress next week, as Democratic

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<v Speaker 2>Senator Corey Booker announces a probe into the potential Paramount

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<v Speaker 2>Warner Brothers merger, and Booker is not the only one,

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<v Speaker 2>with California's Attorney General Rob Bonto warning Paramount's WBT takeover

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<v Speaker 2>is not a done deal yet, vowing a vigorous investigation

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<v Speaker 2>and he's with us right now for more. Attorney General,

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<v Speaker 2>is this deal not over? What are you looking at?

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<v Speaker 1>Not a done deal? The regulatory process still needs to

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<v Speaker 1>be completed. There are hurdles there that have not been

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<v Speaker 1>traversed yet by this proposed deal, and we have a

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<v Speaker 1>job to do and we're going to do it. We

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<v Speaker 1>have an investigation. We're looking at the deal. We're looking

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<v Speaker 1>at its potential anti competitive impacts, and we know that

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<v Speaker 1>corporate consolidation tends to increase prices, lower wages, lower competition,

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<v Speaker 1>lower quality, and limit choice. So we're going to take

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<v Speaker 1>a close look at that, as is our job, and

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<v Speaker 1>make an independent assessment based on the law and the facts.

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<v Speaker 2>I suspect that's an investigation that could take some time.

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<v Speaker 2>This is a massive and sprawling deal with a lot

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<v Speaker 2>of properties. Attorney General. The critics say the problem with

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<v Speaker 2>this deal, and those who favored the idea of Netflix

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<v Speaker 2>buying it, is that this takes an entire movie studio

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<v Speaker 2>off the table. Is that how you're looking at this

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<v Speaker 2>and what would that mean for California's economy?

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<v Speaker 1>Well, one of the we are looking at that for sure.

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<v Speaker 1>One of the first questions is what is the appropriate

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<v Speaker 1>market at issues the market definition, and one is studio.

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<v Speaker 1>You know it will be a studio market consolidation. There's

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<v Speaker 1>also a streaming service market consolidation here. So there's a

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<v Speaker 1>couple of different markets at issue, and you know, California

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<v Speaker 1>is the home of Hollywood, with the fourth largest economy

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<v Speaker 1>in the world. What could this merger should it go

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<v Speaker 1>through and be approved and get through the regulatory process,

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<v Speaker 1>mean it could mean less choices for consumers, higher prices

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<v Speaker 1>for consumers, a less robust creative output and set of processes.

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<v Speaker 1>It could mean, you know, fewer choices and lower quality.

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<v Speaker 1>So there's a lot at stake here for the forty

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<v Speaker 1>million Californians. But these companies, they're so large, there's going

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<v Speaker 1>to be impacts nationwide and worldwide as well.

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<v Speaker 3>You know.

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<v Speaker 2>So of course, not just studios, not just streaming services,

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<v Speaker 2>it's also news.

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<v Speaker 3>And you start to talking about.

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<v Speaker 2>Information on public areas in the case of CBS or

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<v Speaker 2>otherwise on cable with CNN, do you worry about consolidation

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<v Speaker 2>in that business? Do you need promises that that would

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<v Speaker 2>not take place?

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<v Speaker 1>I do worry about that. I think we all are

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<v Speaker 1>worried about that and should be worried about that. We've

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<v Speaker 1>seen what's happened to our independent, objective news that we

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<v Speaker 1>so value, and we take steps to protect that. So

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<v Speaker 1>that is an important area that we're looking at among

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<v Speaker 1>the many other broader areas, and we haven't gotten ahead

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<v Speaker 1>of ourselves as to what the potential remedy is or

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<v Speaker 1>conditions or you know, whether we think there's no way

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<v Speaker 1>that there could be a set of conditions or remedies,

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<v Speaker 1>or maybe we like it exactly the way it is,

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<v Speaker 1>so we're not prejudging it. But we're looking closely as

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<v Speaker 1>we should, as is our duty and obligation.

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<v Speaker 2>I want to move on to some other topics, but

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<v Speaker 2>do you have a sense of how long it'll take

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<v Speaker 2>before you make that determination?

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<v Speaker 1>Because the two companies, Paramount and Warner Brothers are moving

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<v Speaker 1>so quickly, we're going to have to take some action

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<v Speaker 1>at least to maintain the status quo soon, if that's

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<v Speaker 1>what we decide we need to do, and then we'll

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<v Speaker 1>continue the ongoing investigative process and any other action to follow.

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<v Speaker 1>But we can't let this get too far without some action,

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<v Speaker 1>So you'll probably see something sooner than later.

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<v Speaker 2>Weeks, not months, correct, Great Attorney General, I want to

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<v Speaker 2>ask you about tariffs.

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<v Speaker 3>It was one week ago today.

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<v Speaker 2>Kind of hard to believe that the Supreme Court ruled

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<v Speaker 2>to strike down the President's tariff regime. He's of course

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<v Speaker 2>taken some series of actions since then to try to

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<v Speaker 2>reinstate across the board global tariffs, and he talked about

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<v Speaker 2>this at his State of the Union address this week.

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<v Speaker 3>Let's listen.

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<v Speaker 4>They're a little more complex, but they're actually probably better.

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<v Speaker 4>Congressional action will not be necessary.

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<v Speaker 1>It's already time tested.

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<v Speaker 4>And approved, and as time goes by, I believe the

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<v Speaker 4>tariffs paid for by foreign countries will, like in in

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<v Speaker 4>the past, substantially replaced the modern day system of income tax.

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<v Speaker 2>Of course, that was a loaded statement on its own.

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<v Speaker 2>Attorney General, you called it a tremendous win the way

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<v Speaker 2>the Supreme Court ruled. But if the President is following

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<v Speaker 2>up with three zero one or some other mechanism to

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<v Speaker 2>put more tariffs in place around the world, how does

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<v Speaker 2>anything change.

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<v Speaker 1>Well, let me first say I expected the US Supreme

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<v Speaker 1>Court to decide almost exactly the way they did, having

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<v Speaker 1>been at the argument for the US Supreme Court that

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<v Speaker 1>you know the six' to three decision of the, majority

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<v Speaker 1>as well as the reasons it was basically tracked the

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<v Speaker 1>reasons we advanced in our briefing to THE Us Supreme.

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<v Speaker 1>Court of, Course trump is absolutely dead, set even after

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<v Speaker 1>suffering this embarrassing loss on his centerpiece economic, policy to

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<v Speaker 1>continue to try to raise prices For, americans. Unfortunately and

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<v Speaker 1>so our role here is to see if his current

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<v Speaker 1>tariffs are lawful or. Not and we're. Looking we're looking

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<v Speaker 1>with other states. Concerned they are global tariffs that he

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<v Speaker 1>has imposed based on a statute for which it does

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<v Speaker 1>not necessarily appear that he's met their. Requirements there are

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<v Speaker 1>requirements before you can impose those those. Tariffs there needs

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<v Speaker 1>to be a balance of payments. Deficit there's also limits

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<v Speaker 1>about how, long how high they can be the tariffs,

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<v Speaker 1>themselves and how long their duration can. Last so there

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<v Speaker 1>are limits set By. Congress and right now we have

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<v Speaker 1>some major red flags that have been raised around whether

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<v Speaker 1>those requirements are being met.

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<v Speaker 3>Here, well i'll say you it's been pretty.

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<v Speaker 2>Amazing we're going to have to get some more Lawyers attorney.

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<v Speaker 3>General since the, ruling.

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<v Speaker 2>More than one hundred companies of file new lawsuits to

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<v Speaker 2>try to get refunds.

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<v Speaker 3>Here AND i mean these are some big.

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<v Speaker 2>Names you already knew About, costco you Had, FedEx Dice

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<v Speaker 2>In Dollar, General, bousha Lom, Brooks. Brothers this is quite the,

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<v Speaker 2>list knowing that the justices were silent on. Refunds is

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<v Speaker 2>this what we're going to do for the next three.

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<v Speaker 1>YEARS i, mean it should be done quickly and. Expeditiously

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<v Speaker 1>trump unlawfully raised costs for these, companies and these costs

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<v Speaker 1>were passed on To. Americans they deserve a refund with, interest,

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<v Speaker 1>period full. Stop you should look it to them as

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<v Speaker 1>soon as. Possible and you, know he shouldn't fight it in.

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<v Speaker 1>Court he was deemed to be wrong by the highest

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<v Speaker 1>court in the, land a court where he appointed three.

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<v Speaker 1>Justices two of those justices where in the majority opinion against,

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<v Speaker 1>him because they're following the, law and because he's done

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<v Speaker 1>something so clearly. Unlawful the authority he cited gave him

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<v Speaker 1>no right to impose any. Teriffs they have never that

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<v Speaker 1>authority never used the word tariffs in its statutory, language

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<v Speaker 1>and it was never used in nearly its fifty year

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<v Speaker 1>existence to impose tariffs. Before, so, yeah he did something.

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<v Speaker 1>Unlawfully he did something. Wrong he victimized these Companies americans

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<v Speaker 1>by raising. Prices he should make it right by providing

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<v Speaker 1>perstitution and refunds.

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<v Speaker 2>Immediately, Well i'll tell you we'd like to stay in

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<v Speaker 2>touch with you on both of these. Issues come back

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<v Speaker 2>and talk to, us and you decide what to do

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<v Speaker 2>With Warner. Brothers Attorney General Rob, Bonta. California we thank

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<v Speaker 2>you for the insights