Key facts
- Twelve states, led by California, are suing to block the $111 billion merger of Paramount and Warner Bros. Discovery.
- The lawsuit alleges the merger would lead to higher prices, lower quality, and less content for film and television.
- The states argue the deal would consolidate the film distribution and basic cable channel markets.
- The US Justice Department approved the merger on June 12, finding no harm to competition.
- Paramount stated it is confident the transaction raises no antitrust concerns.
A coalition of 12 states, led by California, has filed a lawsuit in the U.S. District Court for the Northern District of California to block the $111 billion merger between Paramount Skydance and Warner Bros. Discovery. The states allege that the merger, which was approved by the Trump administration last month, would violate the Clayton Act by substantially lessening competition.
California Attorney General Rob Bonta stated that the unlawful merger would lead to higher prices, lower quality, and less content for film and television, negatively impacting movie theaters, basic cable distributors, and audiences. The lawsuit highlights that the combined entity would control a significant portion of the theatrical film release market and the basic cable channel market.
The states argue that the companies' public commitment to release at least 30 films annually is an 'empty commitment' and does not address the harms to competition. They point out that Warner Bros. has previously fallen short of its film release commitments.
The merger would combine two major film studios and merge streaming services Paramount+ with HBO Max. The states have requested that Warner Bros. and Paramount not close the merger until the judicial process concludes, and if they do not agree, the coalition plans to file for a temporary restraining order.
Oregon had previously withdrawn its motion to delay the deal, citing Paramount's non-compliance with investigative demands. In response to the lawsuit, Paramount is reportedly considering moving its corporate headquarters out of California. Paramount has stated it is confident the transaction raises no antitrust concerns, as demonstrated by approvals from dozens of antitrust authorities worldwide.