A coalition of twelve state attorneys general filed a lawsuit on Monday in the U.S. District Court for the Northern District of California to block Paramount Global’s planned Skydance acquisition of Warner Bros. Discovery. Led by California Attorney General Rob Bonta, the suit argues the merger would harm competition in the entertainment industry, potentially driving up prices, diminishing content quality, and limiting choices for viewers and theaters.
The filing follows weeks of anticipation about when action might be taken. CNBC’s David Faber had reported earlier in the day that a action was expected. The complaint contends that the merged entity would control nearly one‑third of films and nearly one‑third of basic cable programming, enabling a scale that could lessen competition across multiple markets.
Paramount and Warner Bros. Discovery announced the transaction with the expectation that Paramount+ and HBO Max would be integrated into a single entity. Paramount’s leadership has suggested the streaming services would operate as one platform after the closing, while stressing the deal would create a strong, well‑capitalized media company capable of competing with other major platforms.
The group of attorneys general includes representatives from Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington, in addition to California. In their press release, they argued that the merger would negatively impact consumers, theaters, and basic cable distributors, and they urged the parties not to close until the judicial process concludes. They also threatened to seek a temporary restraining order if necessary to pause the transaction.
At a news conference in Los Angeles, Bonta reiterated the claims that the merger would dampen competition, raise prices, and reduce the volume and variety of content available to audiences. He framed merger control as essential to maintaining a healthy economy where competition supports innovation and affordability.
Paramount responded with a statement describing the lawsuit as a misrepresentation of competition and arguing that blocking the deal would undermine antitrust principles that promote more competition, consumer choice, and opportunities for creators and workers. The company contended that delaying or halting the transaction would harm entertainment workers who have faced disruption in recent years and could cost California tens of thousands of entertainment jobs.
The complaint highlights concerns about the size of the combined company, noting the merged entity would control roughly one‑third of films and about a third of basic cable programming. The attorneys general urged Warner Bros. and Paramount not to close the merger until after the judicial process concludes and warned that a temporary restraining order could be sought if the parties proceeded.
Paramount asserted that the merger would create a stronger, well‑capitalized, creative‑first media company better positioned to compete with Netflix and other platforms that have come to dominate the industry for audiences, premium content, and creative talent. It argued that blocking the deal would undermine the goals of antitrust law, which it described as promoting more competition and consumer choice.
The merger had previously won approval from Warner Bros. Discovery shareholders in April, and Paramount leadership indicated the deal remained on track to close by September. Paramount has said that, if combined, the film studios would release about 30 movies per year and that it is committed to protecting jobs across the industry. The deal includes a ticking fee designed to compensate Warner Bros. Discovery if closing slips past September 30; the fee is set at 25 cents per quarter per share, potentially totaling hundreds of millions in cash value each quarter if the closing is delayed.
Hollywood stakeholders have voiced concern about consolidation and its potential impact on film releases and employment. In the wake of the lawsuit, industry organizations and unions expressed apprehension about reduced competition and its effects on workers and consumers, while the entertainment ecosystem weighs the potential consequences for studios, theaters, and distributors.
The European Union’s review of the deal remained ongoing at the time, with a provisional deadline set for July 22, and earlier this month the Commission indicated concessions had been submitted by Paramount to address concerns. The U.S. Department of Justice had given its clearance on antitrust grounds, stating that the evidence did not indicate harm to competition or American consumers. The parties pursued approvals across several jurisdictions as they moved toward a potential close.
Paramount and Warner Bros. Discovery have emphasized that the merged entity would bring together a broad portfolio of film and television properties, including Paramount’s CBS network and pay channels with WBD’s CNN and other brands, as they position for competition in the evolving media landscape.
