The proposed merger between Paramount Skydance and Warner Bros. Discovery is facing its biggest legal challenge yet.
A coalition of 12 state attorneys general, led by California Attorney General Rob Bonta, has filed an antitrust lawsuit seeking to block the proposed $110 billion deal, arguing it would reduce competition across Hollywood while leading to fewer jobs, lower wages for entertainment workers and fewer choices for consumers.
The lawsuit alleges the merger violates the Clayton Act by combining two of Hollywood’s biggest studios and major cable programmers into a single entertainment giant. If completed, the combined company would control nearly one-third of U.S. theatrical film distribution and basic cable programming, according to the complaint.
Joining California in the lawsuit are Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington.
“We have antitrust laws and merger controls for a reason, because competition is the lifeblood of a healthy and vibrant economy,” Bonta said while announcing the suit. “Competition pushes companies to produce their best work, to innovate, and to offer fair and reasonable prices.”
The states argue the merger would reduce competition for creative talent, ultimately resulting in lower pay and fewer employment opportunities across the film and television industry while potentially increasing cable prices and reducing programming choices for consumers.
Paramount has pushed back strongly against those claims. “The lawsuit… reflects a fundamentally flawed application of the antitrust laws and is wrong on both the facts and the law,” the company said in a statement, maintaining that the merger would strengthen competition against larger streaming rivals while expanding production and creative opportunities.
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Writers Guild of America Sues
The legal fight intensified Tuesday when the Writers Guild of America filed its own federal lawsuit seeking to stop the transaction.
The guild argues that the combined company would become the nation’s largest buyer of film and television writing services, giving it greater leverage to suppress wages, eliminate jobs, and reduce the amount of original programming produced.
“The Writers Guild of America will not stand idly by as Paramount attempts to violate our country’s antitrust laws and deepen the contraction entertainment workers already feel,” WGA East President Tom Fontana said in announcing the lawsuit.
Paramount has countered that the merger would actually increase opportunities, pointing to plans to release 30 theatrical films annually and maintain Paramount and Warner Bros. as separate studio labels under independent creative leadership.
The deal has already cleared scrutiny from the U.S. Department of Justice, which concluded in June that the merger was unlikely to substantially lessen competition. Several international regulators, including Canada, Australia and China, have also signed off, though reviews remain ongoing in the European Union and the United Kingdom.
If the merger isn’t completed by Sept. 30, Paramount would owe shareholders a substantial “ticking fee” under the merger agreement, increasing the financial pressure as the legal battle unfolds.
