States File Antitrust Suit to Block Paramount's $111 Billion Purchase of Warner Bros. Discovery
A coalition of 11 state attorneys general has sued Paramount in federal court, alleging the proposed $111 billion acquisition of Warner Bros. Discovery would violate antitrust law by reducing competition in theatrical distribution and basic cable licensing.
A group of attorneys general from Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington filed a lawsuit in a California federal court on Monday seeking to stop Paramount Pictures’ planned $111 billion acquisition of Warner Bros. Discovery. The complaint alleges the merger would breach the Clayton Act by creating a dominant position in wide-release theatrical distribution and basic-cable licensing, potentially leading to higher prices, fewer movies and reduced content variety.
The states request that Paramount refrain from closing the deal until the case is resolved and say they will seek a temporary restraining order if the company proceeds. They contend that, after the merger, four studios would control more than 85 percent of wide-release films, which account for the bulk of box-office revenue, and that Paramount would hold over 30 percent of blockbuster distribution.
“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 across the United States,” said California Attorney General Rob Bonta.
Paramount responded that the lawsuit “reflects a fundamentally flawed application of the antitrust laws” and argued the combined company would be a stronger, well-capitalized media entity better able to compete with streaming giants such as Netflix. The studio’s legal chief, Makan Delrahim, said consolidation is necessary to counteract the market power of major technology platforms.
The Justice Department approved the transaction in June, finding it would increase competition in streaming, linear TV and film production without requiring divestitures. International regulators in several countries have also cleared the deal. Paramount still awaits approvals from the Federal Communications Commission, U.K. antitrust authorities and the European Commission.
Separately, consumer groups have sued to block the merger, claiming it would enable Paramount to raise prices and limit output. To address concerns, Paramount CEO David Ellison has pledged to release at least 30 movies annually with a minimum 45-day theatrical window and to keep Paramount and Warner Bros. operating as independent studios, though critics question the feasibility of those commitments.