Twelve states have filed a lawsuit to halt Paramount’s acquisition of Warner Bros. Discovery, contending that the $81 billion merger would stifle competition in Hollywood and reduce options for consumers nationwide. California Attorney General Rob Bonta, spearheading the legal action, warned that the unlawful merger would lead to increased prices, a decrease in movie and TV show offerings, and a decline in content quality.
The proposed union between Paramount and Warner would consolidate two of the last five legacy studios in Hollywood, uniting Warner’s assets such as HBO Max, renowned film libraries like “Harry Potter,” and CNN with Paramount’s CBS and Paramount+ streaming service. The lawsuit asserted that this consolidation would harm movie theaters and basic cable distributors.
Paramount responded by stating that the legal challenge misinterprets established antitrust laws and defended the merger as a move to create a stronger competitor against dominant streaming and tech platforms, which have negatively impacted the theatrical exhibition market and entertainment industry jobs. Paramount, acquired by Skydance last year, vowed to vigorously defend the merger, while Warner declined to comment on the lawsuit.
Apart from California, the states involved in the lawsuit include Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington. The legal action comes at a critical juncture for the Paramount-Warner deal, which received shareholder approval in April after a highly publicized bidding war with Netflix and was recently endorsed by the Trump administration.
The lawsuit seeks to delay the merger until the judicial process is completed, with the possibility of a temporary restraining order if the companies proceed without agreement. Paramount faces a deadline to close the deal by the third quarter of this year, offering compensation to shareholders if the deadline is not met. The merger, valued at nearly $111 billion including debt, has received regulatory clearances in several countries but faces ongoing reviews in the EU and the UK.
While Warner and Paramount argue that the merger would benefit industry growth and provide consumers with more content, critics fear the consolidation would further concentrate power in an already few major players-dominated industry. Critics, including professionals in the entertainment sector, have raised concerns about potential job losses, reduced wages, limited programming variety, and higher consumer prices resulting from the merger.
The legal battle has also raised political questions, with criticism dividing along party lines in Washington. Some attorneys general criticized the Justice Department’s decision not to challenge the deal, citing concerns over potential political influence due to the close ties between the president and Paramount CEO David Ellison’s family. Despite DOJ support for the merger, concerns remain about the impact on media competition and the future of networks like CNN under Paramount ownership.
