Twelve US states sue to block Paramount’s Warner Bros. takeover

A coalition of twelve U.S. states, led by California, has filed a lawsuit to prevent Paramount and Skydance's proposed $110 billion acquisition of Warner Bros. Discovery. The states argue the merger, billed as the largest in Hollywood history, poses a significant threat to competition within the film and television sectors.

Filed in federal court in northern California, the lawsuit directly challenges the Justice Department's recent approval of the deal. California Attorney General Rob Bonta stated that the combination of two major film distributors would result in "higher prices, lower quality, and less content" for consumers. He emphasized that the states are fighting for fair markets, asserting that "America has no kings in government or our economy."

The states contend the merger violates the Clayton Act, a federal law prohibiting deals that could substantially reduce competition. The coalition, which includes Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington, has requested that the companies halt the transaction pending the legal challenge. They also warned of seeking a temporary restraining order if the companies proceed.

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In this country, no one is above the law. California and our sister states are fighting for free and fair markets, not rigged markets. America has no kings in government or our economy.

The merger had previously received approval from federal antitrust authorities, a notable victory for Paramount, which is financed by a close billionaire ally of former President Donald Trump. The deal's approval was seen as a significant win for Paramount CEO David Ellison, whose father, Oracle co-founder Larry Ellison, provided substantial financing. The elder Ellison is known for his close ties to Trump.

The combined entity would encompass a vast array of assets, including CNN, Warner Bros. Pictures, and the HBO Max streaming service. Hundreds of actors and directors have also voiced opposition, expressing concerns that the merger could stifle production in an industry already grappling with consolidation and cost-cutting measures. The European Commission is also reviewing the acquisition, with a decision due by July 22.

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higher prices, lower quality, and less content