Key facts
- California and 11 other states are suing to block Paramount's $110 billion acquisition of Warner Bros. Discovery.
- The lawsuits allege the merger would reduce competition, harm consumers, and negatively impact screenwriting services.
- California has hired the law firm Milbank LLP to assist in its legal challenge.
- The Writers Guild of America claims the deal would suppress writers' wages and reduce employment opportunities.
- Paramount argues the lawsuit distorts antitrust law and misrepresents competition.
Twelve states, led by California, and the Writers Guild of America are suing to block Paramount's proposed $110 billion acquisition of Warner Bros. Discovery. The states allege the merger would violate antitrust laws, reduce competition, and lead to higher prices for consumers and movie theaters. California Attorney General Rob Bonta stated that the deal would concentrate market power in both movie theaters and basic cable to more than 27% each, giving the new entity unfair bargaining leverage over theater owners and pay-TV operators. California has hired the law firm Milbank LLP to assist in its legal challenge.
The Writers Guild of America alleges that by reducing the number of buyers for films and TV shows, the deal would harm its members. The union's complaint states that fewer competitors would give the merged Paramount-Warner Bros. entity the incentive and ability to lower costs by suppressing writers' wages and reducing employment opportunities.
Paramount, led by CEO David Ellison, has stated that the lawsuit distorts antitrust law and misrepresents competition in the entertainment industry, vowing to defend the transaction. Paramount also noted that delaying the deal would be costly, with Ellison agreeing to pay Warner Bros. Discovery shareholders a 25-cent-per-share 'ticking fee' each quarter if the deal does not close before October, amounting to approximately $650 million per quarter.