By Dave Michaels, Dana Mattioli, Sadie Gurman and Jessica Toonkel

WASHINGTON -- The Justice Department's senior leadership closed an investigation of Paramount's bid for Warner Bros. Discovery before career staffers who were concerned about the acquisition had an opportunity to object, according to people familiar with the matter.

A team of career lawyers who had spent months scrutinizing the deal were leaning toward recommending a lawsuit challenging it on the grounds that the combination of the two movie studios would be anticompetitive and violate antitrust law, the people said.

The staff investigators hadn't yet made a final recommendation -- a typical step in the deal-review process -- and were told Friday that the department would close the investigation, effectively clearing the deal at the federal level, some of the people said.

The Justice Department's senior leaders believed that Paramount Chief Executive Officer David Ellison, son of Trump ally Larry Ellison, persuasively addressed many of the staff's questions about the deal during a two-hour interview last month, according to people familiar with their thinking.

Among staffers' questions was how the combined company could meet its commitment to make 30 theatrical releases a year, given its increased debt load. The senior leaders allowed the inquiries but believed Paramount's debt wasn't a reason to challenge the merger, the people familiar with their thinking said. No one on the investigative team spoke up to leadership voicing support for filing a lawsuit, they said.

"The Antitrust Division conducted a thorough investigation to assess whether the proposed transaction would harm competition," a Justice Department spokeswoman said. "The investigatory record indicated that the transaction will increase competition across the media and entertainment ecosystem, benefiting American consumers and workers."

Justice Department decision makers often follow staff recommendations on mergers, but there are times when the two camps disagree.

On Friday, the department issued a long, supportive public statement about the merger, saying it would likely be good for competition, especially in the market for streaming video, in which Netflix and Amazon are major players. The statement also said the studio and distribution market has "extensive" competition that would probably continue even after Paramount acquires Warner.

Some staffers in the Justice Department's antitrust division believe the statement was designed to make it harder for state attorneys general to challenge the deal in court, the people said. The investigative staff didn't participate in writing the statement, the people said.

California Attorney General Rob Bonta has been reviewing Paramount's bid and is leaning toward challenging it, The Wall Street Journal reported last month.

In February, Paramount announced its deal to buy Warner Discovery, home to HBO, CNN and Harry Potter, after a monthslong battle with Netflix. The Justice Department's antitrust division has been reviewing Paramount's offer since late last year.

The deal, which has faced opposition from Hollywood, is also under antitrust review in Europe. Paramount executives have told employees to prepare to close the transaction as soon as the end of July.

"Paramount is making strong progress in obtaining regulatory approvals for its pro-competitive merger with WBD," the company said in a statement. "These regulatory approvals and careful analysis underscore a transaction which creates competition against the dominant Netflix and other big tech players in the industry today."

The Justice Department's Paramount investigation is one of several in which antitrust staffers have felt sidelined in the second Trump administration. That includes the department's decision in March to settle a long-running monopoly case against Live Nation -- after the trial had begun. State attorneys general continued to litigate the case and won.

Write to Dave Michaels at dave.michaels@wsj.com, Dana Mattioli at dana.mattioli@wsj.com, Sadie Gurman at sadie.gurman@wsj.com and Jessica Toonkel at jessica.toonkel@wsj.com

(END) Dow Jones Newswires

June 15, 2026 16:12 ET (20:12 GMT)

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