Paramount seeks to close $111 billion Warner Bros. deal amid state antitrust lawsuit
A coalition of 12 states has sued to block Paramount's proposed acquisition of Warner Bros. Discovery, prompting the studio to request a temporary restraining order while it prepares to appeal any injunction.
A group of 12 state attorneys general has filed an antitrust lawsuit seeking to stop Paramount Global's $111 billion purchase of Warner Bros. Discovery. The states argue the merger would give the combined company roughly a 30% share of the blockbuster film market, potentially harming competition in the theatrical sector.
Paramount has asked the court to issue a 14-day temporary restraining order and, if granted, a preliminary injunction that would remain in effect until the case is resolved. The company’s legal team, led by former FTC chair Makan Delrahim and antitrust specialist Jeffrey Kessler, says the merger should proceed and is prepared to appeal an adverse ruling.
"We’ll reach a happy agreement with them," Kessler told CNBC, indicating confidence in a settlement.
The lawsuit does not include streaming services, noting that Paramount+ and HBO Max together account for about 10% of video-on-demand viewership, according to Nielsen data. The states contend that the merger could undermine a recovering theatrical market, while Paramount argues that a delay would cause irreversible financial harm, citing a termination fee of roughly $650 million per quarter if the deal is not closed by Sept. 30.
Paramount has also moved to recuse the original judge, U.S. District Judge P. Casey Pitts, citing potential bias from his prior work with the Writers Guild of America. The case will be reassigned to Judge Araceli Martínez-Olguín, who is already handling related lawsuits from Paramount+ subscribers and the Writers Guild.
In parallel, reports indicate that Paramount CEO David Ellison is being urged by officials in Tennessee to consider relocating the studio’s headquarters out of California, a move that could affect the company’s $30 billion production budget.
If the states’ lawsuit is settled, it may require divestitures of a film studio, cable assets, or a news channel, according to California Attorney General Rob Bonta, who has expressed reluctance to accept behavioral remedies that are difficult to enforce. The outcome will shape the future structure of Hollywood’s major studios.