LOS ANGELES—California Attorney General Rob Bonta has led a coalition of 12 state attorneys general in filing a lawsuit and seeking emergency court action to block Paramount Skydance Corporation's proposed $110 billion acquisition of Warner Bros. Discovery, escalating a legal challenge to what the states describe as the largest merger in Hollywood history.
The lawsuit, filed in federal court in Northern California, argues the transaction would unlawfully reduce competition by combining two of Hollywood's five major film distributors and two of the five largest basic cable channel owners. According to the complaint, the merger would give the combined company control of nearly one-third of U.S. theatrical film distribution and basic cable programming, potentially resulting in higher prices, fewer choices, lower-quality content and harm to movie theaters, cable distributors and consumers.
Bonta's office said the coalition initially asked Paramount and Warner Bros. Discovery not to complete the transaction until the courts had reviewed the case. After the companies declined, the attorneys general filed an emergency motion seeking a temporary restraining order and preliminary injunction to prevent the merger from closing while the litigation proceeds.
"The unlawful merger of Warner Bros. and Paramount would harm movie theaters, basic cable distributors, and ultimately, audiences on every sofa and movie theater seat in the U.S.," Bonta said in a statement announcing the emergency filing. He added that the coalition was asking the court to stop the companies from completing the transaction before the antitrust claims could be fully evaluated.
The coalition includes attorneys general from Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington, in addition to California.
Paramount rejected the states' legal challenge, saying the complaint misapplies antitrust law and ignores the competitive pressures posed by major technology and streaming companies. In a statement issued on behalf of Paramount Skydance, the company said numerous competition authorities had concluded after lengthy reviews that the transaction would strengthen competition and allow greater investment in premium content, theatrical releases and creative talent. It also argued that delaying the merger would benefit dominant technology platforms while harming consumers and the entertainment industry.
The legal action comes despite the transaction having already received clearance from the U.S. Department of Justice, although other regulatory reviews remain pending. The lawsuit by the Democratic-led states represents the most significant legal obstacle facing the proposed merger and sets up a court battle over whether the transaction violates federal antitrust law.
