Paramount Made A Bid to Acquire Warner Bros.-Discovery. Now 12 States Are Suing to Block the Merger.
A coalition of 12 U.S. states filed a lawsuit Monday seeking to stop Paramount Skydance’s proposed $110 billion acquisition of Warner Bros. Discovery, arguing the blockbuster media merger would reduce competition, drive up prices for consumers and further consolidate power in Hollywood.
The lawsuit, led by California Attorney General Rob Bonta and joined by attorneys general from 11 other states, marks the most significant legal challenge yet to one of the largest entertainment mergers in history.
The complaint was filed in federal court in California and asks a judge to prevent the companies from completing the transaction while the case moves forward. If completed, the deal would combine some of the world’s most recognizable entertainment brands under one corporate umbrella, including HBO, HBO Max, CNN, Warner Bros. Pictures, DC Studios, CBS, Paramount Pictures, MTV, Nickelodeon, Showtime and Paramount+.
State attorneys general argue that such concentration would give the combined company outsized influence over the production and distribution of films, television programming, and streaming content.
“The proposed merger would extinguish competition,” the lawsuit argues, alleging consumers could face “higher prices, lower quality, and less content for film,” while creative workers could encounter fewer employment opportunities and less bargaining power.
According to the states, the merged company would control roughly 27% of the U.S. theatrical film distribution market. Combined with Disney, Universal, and Sony, four companies would account for the overwhelming majority of major studio releases, raising concerns about competition throughout the entertainment industry.
The lawsuit also argues that consolidation would strengthen the company’s leverage over movie theatres, basic cable distributors, and, ultimately, audiences nationwide,” while reducing incentives to invest in diverse programming and independent productions.
The legal challenge comes despite the U.S. Department of Justice previously allowing the transaction to move forward after concluding its federal antitrust review. Several international regulators have also approved the merger or are continuing their reviews, leaving the coalition of state attorneys general as the deal’s most immediate legal obstacle.
Paramount Skydance has strongly defended the acquisition, arguing that combining with Warner Bros. Discovery is necessary to compete against technology giants such as Netflix, Amazon and YouTube, which have reshaped the global entertainment landscape.
The company has also said the merger would generate billions of dollars in efficiencies while allowing it to invest more heavily in films, television programming and streaming services.
Paramount is racing to complete the acquisition before a Sept. 30 contractual deadline. If the deal is delayed beyond that date, the company could face significant financial penalties, including quarterly payments to Warner Bros. Discovery shareholders and potentially billions of dollars in additional costs if regulatory hurdles ultimately prevent the transaction from closing.
The proposed merger has already drawn criticism from Hollywood labor organizations, filmmakers, and some lawmakers, who warn that further consolidation could lead to job cuts, fewer original productions, and diminished editorial independence at major news organizations, including CNN and CBS. More than 1,000 members of the entertainment community have reportedly expressed opposition to the transaction.
Critics have raised concerns over the politics of Paramount CEO David Ellison, who is a vocal supporter of President Donald Trump and a close associate of Israeli Prime Minister Benjamin Netanyahu. His father, Larry Ellison, is the co-founder and former CEO of Oracle Corporation.
