Dozens of State Attorneys General Sue to Block Paramount-Warner Bros. Discovery Merger

A group of twelve state attorneys general filed a lawsuit in federal court in Sacramento on Monday to block Paramount Global's $110 billion purchase of Warner Bros. Discovery. The complaint alleges that the merger would reduce competition in wide-release theatrical film distribution, big-budget movie releases, and basic cable television licensing, potentially leading to higher prices and lower quality for consumers.

California Attorney General Rob Bonta, who led the filing, said the merger 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. The lawsuit also names the attorneys general of Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington as co-plaintiffs.

According to the complaint, the combined company would control about 27 % of the box-office market and more than 30 % of big-budget theatrical releases, which have accounted for roughly 88 % of box-office revenue in the past three years. In the cable sector, the merger would give the entity ownership of roughly a quarter of basic-cable channel revenue, including brands such as CNN, Nickelodeon, Cartoon Network, HGTV, Food Network, TNT and TBS. The plaintiffs argue that this concentration would increase the company's bargaining power with distributors, potentially resulting in higher fees that could be passed on to subscribers.

Paramount responded that the lawsuit reflects a "fundamentally flawed application of the antitrust laws" and that the company will vigorously defend the transaction. The studio contends the merger would enhance competition with streaming services such as Netflix, Amazon Prime Video and Disney+, and pledged to release at least 30 theatrical films per year.

The case arrives as the deal faces a contractual deadline; if the merger does not close by September 30, Paramount would incur a $7 million-per-day penalty. The plaintiffs seek a temporary injunction to halt the transaction while the merits are litigated, similar to a prior court order that paused the Nexstar-Tegna merger on antitrust grounds.

The Justice Department, which approved the merger, previously concluded that the transaction would increase competition and benefit consumers and workers.