Two powerhouse Hollywood unions have broken their silence on the Paramount merger fight.
The Directors Guild of America and IATSE, the union representing below-the-line crew members, sent a joint letter to California Attorney General Rob Bonta and Paramount CEO David Ellison urging a negotiated settlement to the antitrust standoff.
The unions warned that prolonged litigation would harm their members.
“While we have been consistent in our view that mergers, such as this one, historically offer few benefits to workers, we are also particularly concerned about the negative impact a delay in the decision regarding the proposed merger will have on our members and the industry at large,” wrote IATSE president Matthew Loeb and DGA executive director Russell Hollander in the letter.
They pleaded for both sides to “engage directly with each other to negotiate a resolution that ameliorates the anti-competitive aspects of the proposed merger.”
If no settlement emerges, the unions want the trial date moved up from its current March 2027 slot.
Ellison had previously pushed for a November start date.
“We further believe the benefits and detriments of the proposed merger should be measured against the alternative outcomes if it is not approved, especially if the anti-competitive impacts of the proposed merger can be mitigated by a binding agreement,” the letter continued.
The unions are not endorsing the merger outright.
A source familiar with the letter emphasized it should not be viewed as a rubber stamp for the deal.
Their primary concern is the operational freeze that lengthy litigation could impose on at least one studio for potentially almost a year.
Among their proposed conditions is a commitment that Paramount would remain in Los Angeles.
Hollywood was rocked last week by news that Ellison is considering relocating Paramount out of California over Bonta’s lawsuit.
Ellison told senior execs he will begin moving operations out of state starting Oct. 1 if no settlement is reached by Sept. 30, sources confirmed to Variety.
The Skydance board has reportedly approved the relocation plan.
Bonta fired back on X, calling the threatened exit “an attempt to blackmail the state into letting an illegal deal through.”
“Paramount has lost the plot as it continues to lose in court,” Bonta wrote. “It didn’t work the first time — on the eve of our July lawsuit — and it won’t work this time.”
The DGA-IATSE position puts them at odds with Hollywood’s two other major unions.
The Writers Guild of America has separately sued to block the deal.
Last month, SAG-AFTRA adopted a resolution supporting the WGA’s lawsuit.
In the viral moment that ignited this broader conflict, Bonta stood before a Hollywood Sign backdrop on July 13 and declared war on the $111 billion merger. Twelve states joined California’s federal lawsuit alleging the deal would violate the Clayton Act by combining two of Hollywood’s top five studios. “There is no debate here: This merger will snuff out competition, drive up prices, diminish content quality, and produce fewer movies and shows each year,” Bonta said at the press conference. A federal judge granted a temporary restraining order six days later, and Paramount agreed to delay closing until June 2027 or five days after a court ruling.
Governor Gavin Newsom has also reportedly encouraged Bonta’s office to find an out-of-court resolution, with sources telling The Wall Street Journal that Newsom worries about state employment impacts if the merger collapses.
The trial is scheduled to begin March 2, 2027, in California’s Northern District and run for 12 court days.