00:00California is weaker than it used to be, and there's no better example of this than the planned merger between
00:04Paramount Skydance and Warner Brothers Discovery.
00:07On Monday, California's Attorney General Rob Bonta announced that he and the other attorney generals suing to block the merger
00:13had agreed to a settlement.
00:14As a result, many people accused him of being a coward, of caving, of capitulating.
00:19Jane Fonda said that he had sold the entertainment industry down the river, but the legal wrangling isn't over yet.
00:24The concern is that having two gigantic media conglomerates combined would reduce competition, and it would also raise prices for
00:30consumers.
00:31Before the settlement was announced, there was a lot of speculation that California's Governor Gavin Newsom had pushed Bonta to
00:37settle.
00:37He didn't want to see a long and drawn-out court battle.
00:40So did other prominent political figures, including the mayor of Los Angeles.
00:43What mostly got their attention was David Ellison's threat to take Paramount Skydance and leave the state, and along with
00:49it, thousands of jobs.
00:50It's hard to overstate how much of a shift in thinking that is for California.
00:53California is the world's fourth-largest economy and the nation's most populous state.
00:57It's used to getting what it wants from corporate America.
00:59It's used to being the one issuing the threats, not caving to them.
01:03But Paramount's threats seem very real because California has real problems these days.
01:07Housing prices are high.
01:09The cost of living is high.
01:10Companies are leaving.
01:11More people have left the state than have moved in in recent decades.
01:14Then there's Los Angeles, the home of Hollywood.
01:17The city has been beset by problems in the last couple of years, chief among them being the fires,
01:21which burned part of the Pacific Palisades, where many movie stars live,
01:25and also a neighboring community of Altadena, where a lot of production workers live.
01:28Given all of that, the threat that Paramount Skydance could leave California seemed really real,
01:33and California just didn't want to take that chance.
01:35Bonta cut a deal, but Hollywood is still likely to get hit with layoffs.
01:39But that just might be an unavoidable reality for a weaker California.
01:42Bonta cut a deal.
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