LOS ANGELES — A coalition led by California Attorney General Rob Bonta has filed a lawsuit seeking to block Paramount Skydance's proposed acquisition of Warner Bros. Discovery, creating a significant legal obstacle for one of the largest entertainment industry mergers in recent history.
The antitrust complaint, filed in the U.S. District Court for the Northern District of California and joined by 11 other state attorneys general, alleges the roughly $110 billion transaction would substantially reduce competition in theatrical film distribution and basic cable programming in violation of Section 7 of the Clayton Act. State officials contend the combined company would control nearly one-third of the U.S. theatrical film market and basic cable programming, giving it greater leverage over movie theaters and cable distributors while ultimately harming consumers through higher prices, reduced output and diminished content quality.
The states are also seeking a temporary restraining order and preliminary injunction after the companies declined a request to delay closing the transaction until the court could review the case, according to the California Department of Justice.
In a statement announcing the lawsuit, Bonta said the proposed merger would eliminate direct competition between two of Hollywood's major studios and could harm audiences, exhibitors and distributors nationwide. The coalition includes attorneys general from California and several other states that argue the transaction would increase market concentration across key segments of the entertainment industry.
Paramount rejected the allegations, saying the complaint mischaracterizes competition in today's media landscape. The company argued the merger would strengthen its ability to compete against large technology and streaming companies, support investment in premium content and benefit consumers and creative talent.
The legal challenge follows the U.S. Department of Justice's decision earlier this year not to oppose the merger, making the states' action the most significant remaining U.S. legal barrier to completing the transaction. International regulatory reviews in some jurisdictions remain ongoing.
Cinema United, a trade organization representing movie theater owners, has backed the lawsuit, arguing further consolidation among major studios could weaken exhibitors' negotiating position and reduce investment in theatrical releases. Paramount disputes those claims and says delaying the merger would damage the industry and expose the company to substantial financial penalties if the transaction is not completed within the agreed timetable.
The case is now before the federal court in Northern California, where judges will consider the states' request for emergency relief while the broader antitrust challenge proceeds.
