LOS ANGELES — Entertainment industry leaders defended consolidation efforts while state regulators and consumer advocates argued for stronger competition safeguards after a multistate antitrust lawsuit challenged Paramount Skydance's proposed acquisition of Warner Bros. Discovery, escalating one of the sector's highest-profile legal disputes.
The lawsuit, filed by a coalition of 12 state attorneys general led by California, seeks to block the proposed transaction, arguing it would reduce competition, increase prices and diminish choices for consumers, movie theaters and cable distributors. The legal action follows the U.S. Department of Justice's decision last month to close its own investigation without challenging the deal, concluding it was unlikely to substantially lessen competition.
Paramount rejected the states' claims in a statement issued on July 13, saying the complaint "distorts settled antitrust law" and misrepresents the competitive landscape facing traditional entertainment companies. The company argued the merger would strengthen its ability to compete against large technology and streaming platforms while supporting investment in theatrical releases and creative talent.
California Attorney General Rob Bonta said the coalition believes the merger would permanently eliminate direct competition between two major studios, potentially resulting in higher prices, fewer films and reduced quality for consumers. According to the complaint, the states are also seeking court orders that could delay the transaction while litigation proceeds.
The Justice Department, however, said in June that its eight-month review found extensive competition across streaming, television and theatrical film distribution. The department said it examined millions of documents and concluded the proposed combination was not likely to harm competition or American consumers, citing continued rivalry from established studios as well as technology companies and independent producers.
Industry observers said the conflicting positions underscore broader debates over how antitrust law should be applied as legacy media companies face growing competition from global streaming services. Supporters of the merger contend larger scale is necessary to compete with technology-backed rivals, while opponents argue further consolidation could reduce consumer choice and weaken competition in film production and distribution.
The proposed acquisition also remains subject to regulatory reviews in several overseas jurisdictions, according to public filings and company statements. The multistate lawsuit is expected to proceed in federal court, where judges will consider requests for preliminary relief before addressing the broader antitrust claims.
