12 State Attorneys General Sue to Block Paramount’s $110 Billion Warner Bros. Discovery Takeover

A coalition of 12 state attorneys general filed a federal lawsuit Monday seeking to block Paramount’s proposed $110 billion acquisition of Warner Bros. Discovery, arguing the deal would stifle competition and harm consumers across the entertainment industry.Led by California Attorney General Rob Bonta, the coalition includes attorneys general from Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington. The lawsuit was filed in the U.S. District Court for the Northern District of California and alleges the merger violates the Clayton Act, a federal antitrust law.“The unlawful merger of these two entertainment behemoths 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.,” Mr. Bonta said in a statement.The states allege the deal would combine two of Hollywood’s five major studios, giving the merged entity control of nearly one-third of wide-release films and one-third of basic cable TV programming. The combined company would also become the owner of the largest portfolio of TV networks in the U.S., merging CBS, MTV, and BET with CNN, TNT, and others, while uniting streaming platforms Paramount+ and HBO Max.The attorneys general have asked Paramount not to close the merger until the case is resolved. If Paramount proceeds, the coalition says it will seek a temporary restraining order.The lawsuit arrives despite the Department of Justice clearing the deal in June without requiring any divestitures or concessions. “The Division has completed its analysis of the proposed merger of Paramount and Warner Bros. and determined based on the evidence received in its investigation that the transaction is not likely to result in harm to competition or American consumers,” the DOJ said in its determination. Regulators in dozens of other jurisdictions — including China, South Africa, Saudi Arabia, and several European nations — have also approved the deal, though the European Commission is still reviewing it ahead of a July 22 deadline.Paramount CEO David Ellison has pushed back against antitrust concerns, arguing that consolidation is necessary to compete with tech giants. In response to the lawsuit, the company said, “We continue to engage constructively with the remaining few regulators around the world still considering the merger, including State Attorneys General, and are prepared to address any legitimate antitrust issues.”Mr. Ellison has pledged to release at least 30 films per year theatrically, maintain 45-day theatrical windows, and keep both the Paramount and Warner Bros. lots operational in California. However, some in the industry remain skeptical, citing the combined company’s estimated $79 billion debt load and only $3 billion in annual free cash flow.Behind the scenes, frustrations are mounting. Sources familiar with internal discussions say Mr. Ellison’s advisers have urged him to consider moving Paramount’s headquarters out of California, where the attorney general that leads the lawsuit is based, Semafor reported.The merger was approved by WBD shareholders in April and had been on track to close by September.

12 State Attorneys General Sue to Block Paramount’s $110 Billion Warner Bros. Discovery Takeover

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