California-led coalition seeks to block Paramount-Warner Bros. merger

• The coalition says the combined company would control nearly one-third of U.S. theatrical films and basic cable programming.
• The attorneys general are seeking to prevent the merger from closing during the judicial process.
• The lawsuit alleges the deal would lead to higher prices, less content and fewer choices for audiences

A coalition of 12 US attorneys general has filed a lawsuit seeking to block the proposed $110 billion acquisition of Warner Bros. Discovery by Paramount Skydance Corporation.

Filed in the US District Court for the Northern District of California, the lawsuit argues the deal would unlawfully reduce competition by combining two of Hollywood's five major film distributors and two of the five largest basic cable channel owners. 

The coalition has also asked the companies not to complete the merger while the case proceeds and said it will seek a temporary restraining order if they decline.

antitrust concerns

According to the lawsuit, the combined company would control nearly one-third of US theatrical motion pictures and basic cable programming. 

Moreover, the attorneys general allege the merger would substantially lessen competition in wide-release theatrical film distribution, anticipated blockbuster film distribution, and the licensing of basic cable television channels.

The coalition also argued that Paramount and Warner Bros. currently compete for movie theatre screens, release schedules and cable distribution agreements, helping to encourage competitive pricing, investment and new content. 

It claims the proposed merger would reduce that competition, leading to higher prices, fewer choices and less content for audiences.

“The unlawful merger of these two entertainment behemoths would lead to higher prices, lower quality, and less content for film and television, harming movie theatres, basic cable distributors, and ultimately, audiences on every sofa and movie theatre seat in the US,” said Attorney General Rob Bonta. 

He added: “With this lawsuit, California and our sister states are fighting for free and fair markets, not rigged markets. America has no kings in government or our economy.”