California is leading a coalition of twelve states in a lawsuit to block the proposed $110 billion acquisition of Warner Bros. Discovery by Paramount Skydance Corporation, citing antitrust concerns that the merger would harm competition in film, television, and streaming markets.
California Attorney General Rob Bonta announced the lawsuit Monday in the Hollywood area, with the Hollywood sign visible in the background. “This merger would lead to higher prices, lower quality, and less content for film and television, harming movie theaters, basic cable distributors, and ultimately, audiences on every sofa and movie theater seat in the U.S.,” Bonta said in a statement.
The lawsuit, filed in Northern California, claims the merger violates the Clayton Act, which addresses mergers that may substantially lessen competition and create monopolies. The combination would bring together Paramount’s broadcast network CBS and cable channels like MTV and BET with Warner Bros. Discovery’s CNN, TNT, and other properties under one corporate roof.
For Los Angeles, where both studios have deep historical roots and employ thousands of industry workers, the lawsuit carries particular weight. More than 1,000 industry professionals, including actors, directors, and writers, have signed an open letter opposing the merger, arguing it would consolidate power and reduce opportunities for creative talent.
Paramount Skydance pushed back against the lawsuit, calling it a distortion of settled antitrust law. “The 12-state lawsuit distorts settled antitrust law and is based on a misrepresentation of competition in the entertainment industry today,” the company said in a statement. Paramount argued the merger would create a “stronger competitor against dominant streaming and technology platforms who have harmed the market for theatrical exhibition and jobs in the entertainment industry.”
The U.S. Justice Department signed off on the merger in June, saying the transaction is “not likely” to result in harm to competition or consumers. However, the state coalition, which includes Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington, is pressing forward with the legal challenge.
David Ellison, CEO of Paramount Skydance and son of Oracle co-founder Larry Ellison, has said the merger would honor the legacy of both companies while creating a next-generation media and entertainment business. Warner Bros. shareholders approved the proposed merger in April.
The deal remains under review in the European Union and United Kingdom. China, Canada, and Australia have already granted regulatory clearances. The companies have said they hope to close the deal in the third quarter of this year.
