What David Ellison Is Really Up to

At first it just seemed like a happy coincidence — a Hollywood agency mogul supporting a Hollywood corporate merger. Ari Emanuel published an op-ed in The Wall Street Journal last Tuesday saying David Ellison buying Warner Bros. was a good idea and that those 12 Democratic AG’s who have sued to stop the deal were on the wrong warpath. 

“The attorneys general should drop this case and get back to enforcing the laws as they are written,” the WME chief wrote, as he extolled a Paramount-WB tie-up and said it would be good for the business. 

Sure, Ellison had committed last year to pay Emanuel’s TKO $7.7 billion to broadcast UFC fights, a fact he conveniently neglected to mention. And the timing certainly benefited Ellison — earnings were coming, a time when Wall Street would be paying close attention and could express its worry financially about a deal falling through. But still, just a nice little stocking-stuffer under the mogul’s tree.

Over the past week, however, the support has started to look a lot less like passive presents and a lot more like an active strategy. That strategy? Make it seem like a lot of Democrat-approved personalities have no problem with the merger, isolating Rob Bonta, Tish James and the rest of the dozen AGs suing to block the deal as a bunch of regulatory crazies. Never mind that these are some of the country’s most decorated legal enforcers, with many decades of experience, from places as different as Arizona and Massachusetts. 

The maneuvers unfolded like a stunt pilot’s careful course-plotting. A few days after the Emanuel op-ed came an anonymously sourced story Friday in the Journal about how one of the preeminent national Democratic leaders, California governor Gavin Newsom, was behind the deal foursquare, according to “people close to the suit.” “Newsom’s office has encouraged Attorney General Rob Bonta’s office, which has independent authority to file such suits, to find a resolution out of court,” the paper said. 

Never mind that Newsom has a long history of deferring to giant corporations (remember his 11th-hour pro-Big Tech capitulation on Scott Wiener’s AI bill in 2024?) — this merger was going to create jobs! (“State employment would suffer” without a deal, the paper said Newsom has told colleagues, never mind that no credible economist has supplied such evidence. In fact, L.A. County’s Department of Economic Opportunity published a report stating nearly 2,500 jobs are at risk to be eliminated in the county alone if the deal goes through.) Another happy coincidence. Or, given that the paper was pointedly not citing sources close to Newsom, perhaps part of an Ellison-led strategy.

Then today, an op-ed of Ellison’s own in a redoubt of mainstream liberalism, The New York Times. He trotted out all the usual arguments for mergers these days, and against his own naysayers — if we don’t do this the tech companies win, movie theaters should survive, Hollywood should be employed. “What I can promise is the work, and more of it,” he wrote, using the noun four times, which is four times more than he used the noun Donald Trump. (Los Angeles County has determined that determined that the merger will likely lead to less work.)

Meanwhile, Ari has been hitting the hustings, appearing on CNBC Tuesday morning to rattle off a series of Ellison talking points and praising the mogul. “This is a guy who said ‘hey I’m going to make 30 movies a year, 45-day release,” Emanuel said. “He’s gonna spend he says 30 billion in content a year. We need that for the economy of Hollywood.” The comments wouldn’t have been out of place on the Paramount investor earnings-call Tuesday, where executives touted all these numbers and used words like “pro-competitive” to describe the deal. If there’s one thing we know about capitalism, it’s that combining  two major companies leads to more competition.

These media hits that aimed to buck the headwinds even involved a literal plane —  the day Bonta and the AGs were suing, Ellison jetted to Washington to lobby for a federal tax credit, a news stunt meant as much to lobby support among Hollywood as to win over legislators. One story the move overshadowed that week: ProPublica’s bombshell report that Paramount allegedly provided gifts to FCC commissioners reviewing the deal.

More of these pieces and columns are no doubt coming. More foot soldiers arguing for the value to the business, or the First Amendment. Never mind that the WGA — those fierce opponents of free expression! — have just sued to stop the  deal. Doesn’t the world’s richest family have the right to own CNN? Isn’t that enshrined in the Constitution?

It’s a shrewd flyer, and you need to give Ellison’s team credit for landing it so effectively.

You also hardly need an advanced radar beacon to see what’s happening. Having courted MAGA and Donald Trump to get the deal federal approval — how many Kennedy Center boxes and UFC ringside seats can one centibillionaire’s son fill? — Ellison is now pivoting to work on Dems to take care of the state challenge.

Not regulatory-minded Dems, as that group, from Elizabeth Warren to Cory Booker to Adam Schiff, have all been fiercely critical of the deal and asked hard questions about combining the country’s third and fourth biggest pure-play entertainment companies. Not these decorated and often landslide-winning AGs.

But if you get enough people like Newsom and the Kamala-donating Ari on your side, maybe people won’t notice all the Democrats who aren’t. Or enough of their consistuents will lose interest, causing AGs to do the same.

Maybe people will magically forget that no fewer than 1,000 creatives, from  Bryan Cranston to J.J. Abrams to Glenn Close to Lin-Manuel Miranda, all signed a letter this spring opposing the deal, noting how a merger “would further consolidate an already concentrated media landscape, reducing competition at a moment when our industries—and the audiences we serve—can least afford it” and lead to “fewer opportunities for creators, fewer jobs across the production ecosystem, higher costs, and less choice for audiences in the United States and around the world.” But an agent told me it was good for creativity?

There’s a reason Paramount needs the deal to happen. Warner Bros. Discovery turned in a profit of $1.2 billion this past quarter once you strip out all the money they have to pay as part of the acquisition. That’s a lot of profit for a company like Paramount, which revealed Tuesday that in the same quarter it netted $41 million.

And there’s a reason Paramount needs the deal to happen soon. Starting Oct. 1, Paramount must pay Warners shareholders $7 million every day until the deal closes. By the second week, they’ll have wiped out all the measly profits they earned this quarter. By the spring, they’ll have wiped out the profits of the company they’re buying. One can’t imagine a lot of joy on Melrose, then, when the word came down Tuesday that the trial won’t start until March.

Also, the deal is partly bankrolled by Larry Ellison and his significant AI investments. And can that boom go on forever?

The reality is the AGs may not just have the law on their side — they have the leverage. And with every week that passes they have more of it. Could they extract a major settlement — possibly even carving out CNN? Don’t rule it out, no matter how many UFC fights Ellison attends with the president.

“Winning comes down to having the best stories,” Paramount CFO Dennis Cinelli told investors on the earnings call Tuesday. Ellison and his allies will keep telling them. That doesn’t mean it will result in victory.