A coalition of 12 state attorneys general filed a federal lawsuit Monday to block the proposed combination of Paramount Skydance and Warner Bros. Discovery, arguing the deal would concentrate nearly a third of U.S. film output and basic cable programming in a single entity. The complaint, lodged in the U.S. District Court for the Northern District of California, seeks to halt a transaction that would merge two storied studios, fold Paramount+ into HBO Max, and unite the CBS broadcast network with cable channels including CNN, TNT, MTV and BET.
California Attorney General Rob Bonta led the filing, joined by his counterparts from Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington. In the lawsuit and at a news conference beneath the Hollywood sign, Bonta said the merged company would control nearly one-third of films and nearly a third of basic cable TV programming, producing higher prices, lower quality and less content for movie theaters, cable distributors and audiences. The attorneys general demanded the companies not close before the judicial process concludes and threatened to seek a temporary restraining order if they do.
Paramount rejected the allegations as a misrepresentation of competition in the entertainment industry and pledged to vigorously defend the transaction. A company spokesperson said the merger would create a stronger, well-capitalized, creative-first media company better positioned to compete with Netflix for audiences, premium content and creative talent. Paramount also argued that delaying the deal would harm entertainment workers who have already suffered from technological disruption and cost California tens of thousands of jobs.
Warner Bros. Discovery shareholders approved the merger in April, and Paramount chief David Ellison said on a recent earnings call that the deal remains on track to close by September. The agreement includes a ticking fee that triggers if closing extends past Sept. 30, requiring Paramount to pay WBD shareholders an additional 25 cents per share each quarter, a cost the company has valued at roughly $650 million per quarter. The states’ challenge adds a significant legal hurdle to that timeline.