California Attorney General Says Warner-Paramount Merger Still Under Investigation

The U.S. Justice Department approved Paramount-Skydance’s $110 billion purchase of Warner Bros. Discovery, prompting the companies to pledge a swift closing. However, California Attorney General Rob Bonta said the merger remains under investigation by his office, and New York Attorney General Letitia James is also reviewing the transaction.

State attorneys general have the authority to file antitrust lawsuits seeking injunctions that could block the deal, even if federal regulators have approved it, according to Scott Wagner, co-head of antitrust practice at Bilzin Sumberg. Both Bonta’s and James’ spokespeople declined to comment on any pending legal actions.

Industry groups and more than 5,500 actors, directors, producers and screenwriters have signed an open letter urging the attorneys general to challenge the merger, citing concerns about reduced competition, job losses and higher consumer costs. The letter praised the state officials for “scrutinizing the merger and considering legal action to block it.”

Paramount argues the combination will create a more competitive company capable of confronting dominant technology platforms and promises to release 30 films annually in theaters. The company’s legal team, led by litigator Jeffrey Kessler, contends there is no viable antitrust challenge.

Beyond litigation, attorneys general can employ information requests and targeted reviews to delay the transaction, potentially affecting its timing and cost. The merger also faces scrutiny from European and U.K. regulators, which have opened separate antitrust probes.

If the deal is not completed by Sept. 30, Paramount must pay Warner shareholders a quarterly “ticking fee” of $0.25 per share, a penalty that could exceed $600 million per quarter.