Paramount is facing another major legal challenge in its proposed $111 billion acquisition of Warner Bros. Discovery. According to The Hollywood Reporter, coalition of 12 state attorneys general, led by California, has filed a federal lawsuit seeking to block the merger.
The states argue that combining Paramount and Warner Bros. Discovery would violate antitrust laws by reducing competition across theatrical distribution and cable television licensing. The Hollywood Reporter includes a statement from California Attorney General Rob Bonta, who said at a press conference, “There is no debate here: This merger will snuff out competition, drive up prices, diminish content quality, and produce fewer movies and shows each year.”
The lawsuit alleges that the merger would combine two of Hollywood’s five largest studios, giving the combined company greater control over the theatrical marketplace. The Hollywood Reporter notes that the deal could lead to fewer movies being released each year, higher prices for consumers, and less variety in the content available to audiences.
The coalition includes attorneys general from Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington. They are asking the court to prevent Paramount from completing the merger until the lawsuit is resolved and have indicated they will seek a temporary restraining order if necessary.
Paramount strongly disputed the lawsuit. In statements cited by The Hollywood Reporter and Deadline, the company called the case “a fundamentally flawed application of the antitrust laws” and said it would “vigorously defend the transaction.”
Paramount argued that combining with Warner Bros. Discovery would create “a stronger, well-capitalized, creative-first media company” that is better positioned to compete with streaming giants like Netflix. The company also warned that delaying the merger “will only harm entertainment workers who have already suffered over recent years as technology has disrupted their livelihood.”
The lawsuit arrives just weeks after the U.S. Department of Justice approved the merger without requiring divestitures or other conditions. The states’ challenge now creates another hurdle for the transaction, which still requires approval from the Federal Communications Commission, the European Commission, and U.K. regulators.
According to the complaint, if the merger is completed, Paramount would gain significant leverage in negotiations involving blockbuster films and cable television licensing. If the lawsuit succeeds, it could significantly delay one of the largest media mergers in recent years and reshape Hollywood’s evolving entertainment landscape.