12 states sue to block Paramount’s $110B Warner Bros. deal

A group of 12 state attorneys general has initiated legal action aimed at preventing the merger between Paramount Skydance and Warner Bros. Discovery (WBD). They assert that this acquisition poses a threat to movie theaters, basic cable distributors, and audiences alike. Spearheaded by California Attorney General Rob Bonta, the coalition claims that the merger infringes upon the Clayton Act, which is designed to prevent deals that could significantly reduce competition or lead to monopolistic practices. The attorneys general highlight potential harms in three critical areas: wide release theatrical film distribution, the distribution of top-grossing films, and basic cable licensing. This merger would unify two prominent film studios and streaming services—Paramount+ and HBO Max—while also creating one of the largest collections of television networks by merging Paramount’s CBS and MTV with WBD’s CNN and HBO. Industry professionals, including filmmakers and actors, have voiced concerns over the merger, arguing that it would diminish competition and further consolidate the U.S. media landscape. In response, Paramount has countered that the combined entity would produce around 30 films annually. The coalition of states contends that if the merger proceeds, Paramount would gain considerable control over key sectors of the entertainment industry, capturing 27% of the U.S. film distribution market, 30% of blockbuster distribution, and 27% of the basic cable channel market. "Consolidation in this sector not only drives up prices but also limits opportunities for diverse stories to emerge and for audiences to access varied narratives and perspectives," stated Bonta. "In this nation, no entity is above the law. This lawsuit represents a stand for fair and open markets, free from rigged systems. America does not have kings, whether in governance or the economy." In May, Paramount CEO David Ellison indicated that the merger was expected to finalize by September. The deal had already received backing from WBD shareholders in April and was deemed acceptable by the U.S. Department of Justice, which determined it would not likely harm competition or consumer interests. The states joining California in this lawsuit include Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington. As of now, Paramount and WBD have not provided comments regarding the lawsuit.