A bipartisan group of 12 US state attorneys general filed a lawsuit on Monday seeking to block the $110bn merger of Paramount Skydance and Warner Bros Discovery, arguing that the deal would stifle competition and lead to higher prices for consumers.
The coalition, led by California Attorney General Rob Bonta, includes Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington. Bonta has been a vocal critic of the merger since it was agreed in February after a bidding war between David Ellison's Paramount Skydance and Netflix.
Lawsuit targets competition and consumer impact
“Today, I am leading a coalition of states in challenging the proposed merger of Warner Bros and Paramount and asking the court to block the deal,” Bonta said in a statement. “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 US.”
The lawsuit, filed in the US District Court for the Northern District of California, asks a judge to halt the merger until the judicial process concludes. “In this country, no one is above the law,” Bonta added. “With this lawsuit, California and our sister states are fighting for free and fair markets, not rigged markets. America has no kings in government or our economy.”
Regulatory backdrop and timeline
The lawsuit comes a month after the US Department of Justice approved the deal, removing a major hurdle. While dozens of countries have also cleared the merger, it still awaits approval from regulators in the UK and Europe. On June 30, UK Culture Secretary Lisa Nandy said she was “minded” to intervene, asking Ofcom and the Competition and Markets Authority to investigate further, potentially delaying the timeline.
Paramount Skydance and Ellison have defended the merger, arguing it will boost competition and preserve Hollywood's theatrical model. “The lawsuit filed by the state attorneys general, in the most generous light, reflects a fundamentally flawed application of the antitrust laws and is wrong on both the facts and the law,” Paramount said in a statement. “We will vigorously defend the transaction and demonstrate that this challenge is inconsistent with sound competition policy and the competitive realities of the media marketplace. Delaying this transaction will only harm entertainment workers who have already suffered over recent years as technology has disrupted their livelihood and cost California tens of thousands of entertainment jobs.”
Political ties and broader concerns
David Ellison's close ties to his father, Oracle billionaire Larry Ellison, and members of the Trump administration have sparked questions about whether the regulatory process was unfairly tilted. “Antitrust enforcement is democracy's check on oligarchy,” Bonta told reporters. “Antitrust enforcement is a check on billionaires currying favor with the president so he'll do their bidding.”
Paramount Skydance aims to close the deal by September 30; after that, it must pay a “ticking fee” of $0.25 per share each financial quarter until closing, potentially adding hundreds of millions to the final price. Journalists at CBS News and CNN have expressed concerns about potential job cuts from the merger of their parent companies. While the lawsuit focuses on movie and cable competition, Bonta acknowledged journalism impacts: “This merger will mean fewer journalists informing the electorate. It will mean fewer opportunities for Americans to hear the full breadth of information and opinions on a subject, and then come to their own conclusions.”
