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Hey, happy Wednesday. In this edition: George W. Bush extols a free press. Kash Patel loses a (different) defamation case. And the journalism world mourns a beloved editor and reporter. But first...

Paramount-WBD deal nears a key green light

Paramount's acquisition of Warner Bros. Discovery is poised to clear a pivotal hurdle tomorrow.

WBD shareholders will vote on the $110 billion deal on Thursday morning. With the company's board and multiple proxy advisory firms urging shareholders to vote yes, the deal is expected to be approved. An announcement to that effect is expected shortly afterward.

A year ago, WBD was trading at about $8 per share, so Paramount's $31-per-share offer is a relief to many investors. But David Ellison's ambitions to roll up Paramount and Warner (and potentially merge CBS News with CNN) remain a source of anxiety to many in the media industry. 

Ellison "dominated conversations" at CinemaCon last week, Variety's Brent Lang wrote, "with cinema executives openly worrying that his deal to merge Warner Bros. and Paramount would give him too much power."

But this has always been the story of Hollywood — people buying their way in, building empires, exploiting new technologies, and hopefully creating some Oscar-worthy stories along the way.

"Our goal," Ellison told ad execs last night, "is to build a leading media and entertainment company that strengthens competition, better serves the creative community, and delivers even more compelling stories to audiences around the world... We're doing exactly that by investing in great content and attracting and empowering exceptional talent, both in front of and behind the camera, and equipping our people with cutting edge technology that enables them to do their best work."

Stoking an air of inevitability

After the WBD vote tomorrow, Ellison will be in Washington for a dinner "honoring the Trump White House and CBS White House correspondents," pegged to this weekend's WHCA soiree.

The event, first reported by Lachlan Cartwright's Breaker newsletter, is drawing some fierce criticism. The company isn't responding to inquiries about it. But it's easy to see a connection between Ellison's DC dinner plans and the ongoing regulatory review of the WBD deal.

Paramount's close ties to President Trump have contributed to a widespread perception that the feds have blessed the deal. FCC chair Brendan Carr said last month, "I think this is a good deal, and I think it should get through pretty quickly."

However, the Democratic state attorneys general — who just succeeded in blocking the Nexstar-Tegna deal — think differently. The state AGs are contemplating whether to challenge Paramount-WBD on antitrust grounds.

From Paramount's POV, there's no there there, no serious argument against the takeover. But last night, Puck's Eriq Gardner reported that California AG Rob Bonta's office "has begun scouting for outside counsel" for a potential suit.

Gardner wrote that a "state-led preemptive strike — regardless of its ultimate merits — looks increasingly inevitable as regulators navigate the political overtones and a rising appetite for action."

More on that down below. European regulators are also taking a close look at the deal. In the UK, the Competition and Markets Authority is soliciting public comments and signaling that it will launch a phase-one investigation soon.

But, of course, Paramount execs have gamed all of this out and have gobs of data to defend the deal with. For example: HBO Max and Paramount+ combined still wouldn't be nearly as big as Netflix.

"We have been talking with regulators for months and months already," a person close to the transaction said, reiterating why Paramount is confident that it will be able to take control of WBD sometime in Q3 of this year.

Inside WBD: deal or no deal

At the top of Paramount and WBD, integration planning is underway, although the two companies still have to be operated separately for now. 

Generally speaking, there are two camps of people inside WBD: Those who assume the deal will go through and are thinking ahead to a WarnerMount future, and those who hold out hope that the deal will be blocked or at least delayed. 

That same dynamic exists in the wider entertainment world: Many industry insiders talk about WarnerMount like it's a fait accompli, but thousands of Hollywood actors, directors, writers and other pros have signed an open letter opposing the deal and pressuring state AGs to act.

"It is not a done deal," actress Jodie Sweetin, best known for playing Stephanie on "Full House," said on CNNI's "Quest Means Business" earlier this week. "You can still be fighting this, and really the biggest and most important place to fight it is at the state attorneys general level."

Gardner reported overnight on suspicions that Netflix is helping to bankroll the organizers "as a way to either delay the deal — remember, the Ellisons have to pay WBD shareholders a ticking fee of roughly $650 million per quarter if the closing drags past September 30 — or kill it outright," though Netflix "insists it has nothing to do with the letter or protest."

The state AGs are certainly a big X factor. But a lawsuit, if it comes, is just a starting point. As Politico noted last month, one possible outcome "is a settlement involving concessions of some kind from Paramount." That's what I mean when I say Paramount has gamed all of this out.

In the EU, too, regulators could attach conditions to their approval of the deal, "potentially forcing PSKY to sell smaller European cable brands, divest niche channels, or spin off certain regional assets," MoffettNathanson wrote in an analyst note.

 >> Alden Abbott, who was the FTC's chief legal officer during Trump 1.0, recently wrote that the Paramount-WBD scrutiny is "much ado about not much." The deal "does not present a clear mechanism for anticompetitive harm, nor does it appear likely to enable the exercise of market power," he wrote. "At the same time, it offers plausible efficiencies that could strengthen competition against larger, well-capitalized rivals."

About Zaslav's golden parachute...

WBD shareholders will also have a chance to weigh in tomorrow on the extraordinary compensation package for outgoing CEO David Zaslav. The payout could total as much as $886 million, "one of the highest golden parachutes ever observed," per the L.A. Times.

Shareholders get a non-binding vote on the matter, "meaning that even if they reject it, the payments may still go through," THR's Alex Weprin reported earlier this month.

Despite the massive potential windfall, Zaslav wants it to be known that he wasn't angling to sell to Ellison. "My intention was never to sell the company. My intention was to build and run that company," he told Sharon Waxman, who penned this critical piece for the NYT.

This week's Variety cover story is about the Zaslav era at Warner coming to an end. 

"More than a half-dozen sources close to Zaslav say that the CEO has barely concealed his frustration at being boxed into selling the company by the aggressive overtures of Paramount Skydance chief David Ellison last fall and winter," Cynthia Littleton wrote.

"If you asked him if he'd rather have the job or the money, there's no doubt about that: He'd rather have the job. I really believe that," David Geffen told Littleton. I do, too. 

Nexstar CEO speaks on court ruling

While we're on the subject of mega-mergers and state AGs...

At the NAB Show in Vegas last night, Nexstar CEO Perry Sook made his first public comments about the court ruling that halted his Tegna takeover. He pointed out that most of the state AGs involved are up for reelection this year. "It's easy for me to say this was all political, appeal to a base in an election year," Sook said, per the WSJ's Joe Flint.

Sook said the legal case will "play out over a series of months," and "we'll be vigorous in our defense." Deadline's Dade Hayes has more here...

NEW THIS MORNING

MS NOW hires Shawna Thomas

"Shawna Thomas, the top executive producer who helped lead 'CBS Mornings' for five years before leaving the network last month, is joining MS NOW as political director," Dasha Burns reports in this morning's Playbook. "In her new role, Thomas will oversee coverage of political campaigns and appear on air across all MS NOW platforms."

All four ex-presidents talk to the 'Today' show

Now this is something special: At a Comcast and History Channel gathering in Philly celebrating America's 250th anniversary, Jenna Bush Hager sat down with all four living ex-presidents for individual interviews. The highlights aired on "Today" as part of NBC's Common Ground initiative.

 >> Joe Biden said he's not sure the US is "as divided as we are portrayed." The "vast majority of people," he said, "are coming around" to realizing the importance of "the safeguards in the Constitution."

 >> Bill Clinton said "the freedom to speak, the freedom to vote, the freedom to be active in politics" are keys to America's survival.

 >> Barack Obama stressed that "we don't have rulers, we don't have kings, or monarchs or aristocracies. We have citizens."

 >> And Jenna's father, George W. Bush, championed the First Amendment: "The fact that you can worship freely without government tell you how to worship; the fact that you can speak in the public square without being jailed; the fact that we have a press that's willing to hold the powerful to account — these are all things that should and generally do unite us."

IN OTHER NEWS...

Kash Patel loses a defamation case

...no, not that one.

Yesterday, a federal judge tossed Patel's lawsuit against MS NOW pundit Frank Figliuzzi, who remarked on "Morning Joe" last year that Patel has "reportedly... been visible at nightclubs far more than he has been on the seventh floor of the Hoover building."

"A person of reasonable intelligence and learning would not have taken his statement literally," US District Judge George Hanks Jr. wrote in his dismissal. "Figliuzzi's statement is rhetorical hyperbole that cannot constitute defamation."

And defends his other defamation case

Around the same time that ruling came down, Patel was holding a press conference touting the federal charges against the Southern Poverty Law Center. Patel lashed out against "the fake news mafia" and denied The Atlantic's story.

"I've never been intoxicated on the job, and that is why we filed a $250 million defamation lawsuit. And any one of you that wants to participate, bring it on," Patel said. CNN's Holmes Lybrand has more on that presser here...

Ex-Capitol officer sues Glenn Beck's outlet

Shauni Kerkhoff, the former Capitol Police officer falsely accused by The Blaze of planting pipe bombs on Jan. 6, 2021, has sued the right-wing outlet for defamation.

In the complaint, Kerkhoff accuses the Glenn Beck-owned Blaze Media and its two now-former reporters, Steve Baker and Joseph Hanneman, of "relying on a faulty 'gait analysis' of surveillance footage to wrongly suggest she was the person who planted pipe bombs outside the RNC and DNC the night before the Jan. 6 riot," Politico's Kyle Cheney and Josh Gerstein report.

 >> The Blaze "simply made it up," Kerkhoff's lawyers write, adding that the report "derailed" her life with conspiracy theories, threats, and a "grueling — and unwarranted — federal investigation."

McClatchy's AI rollout sparks backlash

McClatchy is pushing journalists at the company's papers to use a new "content scaling agent" powered by Anthropic's Claude. But the rollout of the AI news tool has led unions at the Miami Herald, Sacramento Bee and Kansas City Star to file grievances against the company. TheWrap's Corbin Bolies has the full story here...

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