Paramount is preparing its legal defence against a lawsuit filed by a coalition of 12 US states seeking to block its $111 billion (£87 billion) takeover of Warner Bros. Discovery, in a case likely to shape Hollywood's competitive landscape for years. The states argue the merger would harm a "thriving" theatrical film industry, while Paramount contends consolidation is necessary to compete with tech giants such as Netflix, Amazon and Google, framing the deal as beneficial to consumers and workers.

The court must first decide whether to grant a temporary restraining order halting the deal's closure for 14 days, followed by a possible preliminary injunction pending the full case. A key legal threshold is the combined firm's estimated 30% market share of blockbuster films, which narrowly triggers a presumption of antitrust violation under the Supreme Court's Philadelphia National Bank precedent, shifting the burden onto Paramount to prove competition would not suffer. Paramount's legal team, including Makan Delrahim, Jeffrey Kessler and newly hired former Solicitor General Paul Clement, is reportedly ready to appeal any adverse ruling up to the Supreme Court. Notably, the states chose not to include streaming services in their case, likely because Paramount+ and HBO Max together hold only around 10% of video-on-demand viewership. Paramount has dropped its earlier 22 July closing target but still aims to complete the deal by the end of the quarter.