A California-led coalition of 12 state attorneys general sued Monday to block Paramount’s $110 billion takeover of Warner Bros. Discovery, marking the toughest legal challenge yet to one of the largest media mergers in history.
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The , filed in U.S. District Court for the Northern District of California, claims the proposed Hollywood megamerger would control nearly one-third of theatrical motion pictures and nearly one-third of basic cable programming, stifling competition.
“The merger will end this competition permanently,” the states said in the , which alleges the deal violates federal antitrust laws prohibiting mergers that substantially lessen competition or create monopolies.
Headed by California Attorney General Rob Bonta, the coalition also includes attorneys general of Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington.
The states are asking Warner Bros. and Paramount not to close the merger until after the judicial process concludes. The deal is currently scheduled to close in the third quarter of the year.
If the companies refuse to delay the merger, the coalition said it will seek a temporary restraining order.
“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 on every sofa and movie theater seat in the U.S.,” Bonta shared in a statement.
“Consolidation here not only leads to higher prices — it also leads to fewer opportunities for important stories to come to life, and fewer ways for audiences to encounter stories, ideas, and perspectives beyond their own experiences.”
If the merger closes, it would redraw Hollywood, putting film studios Paramount Pictures and Warner Bros., news networks CBS News and CNN, and streaming platforms Paramount+ and HBO Max all under the same umbrella.
The merger would leave four major film distributors controlling more than 85% of U.S. wide-release theatrical films and just two companies controlling 59% of basic cable, the suit argues.
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Paramount pushed back Monday, arguing the merger will “create a stronger, well-capitalized, creative-first media company that is better positioned to compete with companies like Netflix that have come to dominate the industry for audiences, premium content, and creative talent.”
“Put simply, any attempt to block this transaction undermines the very principles antitrust law is designed to promote: more competition, more choice for consumers, and more opportunities for creators and workers,” continued a Paramount spokesperson.
The statement added that the company will continue to fight “any attempt to derail a deal that strengthens competition.”
Hollywood already denounced the deal
Hollywood previously voiced concerns over the proposed merger — urging Bonta and other lawmakers to take action.
An April letter signed by thousands, including Hollywood heavyweights Bryan Cranston, Jane Fonda, Ben Stiller, Joaquin Phoenix, Emma Thompson, Jason Bateman, Lin-Manuel Miranda and Kristen Stewart, claimed the merger would lead to fewer opportunities in the industry.
“Our industry is already under severe strain, in large part due to prior waves of consolidation. We have witnessed a steep decline in the number of films produced and released, alongside a narrowing of the kinds of stories that are financed and distributed,” the letter said.
“Increasingly, a small number of powerful entities determine what gets made — and on what terms — leaving creators and independent businesses with fewer viable paths to sustain their work.”
In response to the suit filed Monday, Michael O’Leary, president and CEO of Cinema United, said in a statement, “The ramifications of further movie studio consolidation will be significant and lasting, not just in Hollywood, but on Main Streets across this nation where local movie theaters serve as cultural and financial cornerstones for communities of all sizes.”
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