David Ellison, Paramount Skydance’s chairman and CEO, has championed the deal with Warner Bros. Discovery from the start.
Noam Galai/Getty Images/Paramount
A coalition of attorneys general from twelve states has initiated legal action against Paramount Skydance, aiming to prevent the entertainment giant’s proposed $110 billion merger with Warner Bros. Discovery. The lawsuit was filed in the US District Court for the Northern District of California, raising significant concerns about the potential for monopolistic practices and diminished competition within the film and cable sectors, ultimately impacting audiences nationwide. Notably, this merger had previously cleared investigations by the US Department of Justice in June, which concluded that it would likely not pose any substantial antitrust risks.
Leading the lawsuit is California Attorney General Rob Bonta, along with legal representatives from New York, New Jersey, Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Mexico, Oregon, and Washington. The group is urging Paramount to pause the merger process until the legal proceedings conclude, warning that they may seek a temporary restraining order if their request is not honored. They argue that if the merger proceeds, Warner Bros. Discovery and Paramount would together command 27% of the theatrical distribution market and a similar share of the cable and satellite channel distribution landscape.
Bonta emphasized the potential negative impacts of the merger, stating, “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 U.S.”
Described as Hollywood’s largest merger to date, the deal is projected to integrate the streaming services of both Paramount and Warner Bros. Discovery into a singular platform, along with significant restructuring within their respective studio lots, film and TV divisions, and cable networks. Additionally, the European Union is currently reviewing the transaction and is expected to announce its decision within the month.