States Sue to Block Paramount-Warner Bros. Merger, Defying DOJ
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A coalition of 12 US states has sued to block the planned Paramount Skydance-Warner Bros. merger, despite the Department of Justice having approved it last month. Led by California Attorney General Rob Bonta, the states argue the $111 billion deal would illegally reduce competition in film distribution and basic cable licensing, which they say could mean higher prices, less content and weaker choice for cinemas, distributors and audiences. The case matters because it challenges a major media consolidation at a time when a handful of legacy studios already dominate the market.
The lawsuit says the merged company would control 27% of the wide-release theatrical market, 30% of the market for anticipated blockbuster films and 27% of the basic cable bundle. The states note that Paramount and Warner Bros. are two of the five remaining legacy studios, and that those five studios together already account for 86% of theatrical distribution and 90% of blockbuster distribution. Cinema United, which represents cinema owners, welcomed the case, while Paramount has defended the merger as pro-consumer and says the combined business would be a stronger streaming rival and would release at least 30 films a year.
- Twelve states are challenging the Paramount-Warner Bros. merger in court
- States say the deal would reduce competition and raise prices
- Paramount says the merger would strengthen output and streaming competition
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Paramount Skydance and Warner Bros. Discovery agreed a merger worth around $111 billion, combining two of Hollywood's five remaining "legacy" film studios into one company. Last month the US Department of Justice, which is meant to police mergers for anticomparativeness, cleared the deal to go ahead. Between them, the five big studios already handle the vast majority of films shown in cinemas and virtually all major blockbusters.
That approval has now been challenged in court. A group of 12 US states, led by California's attorney general, has filed a lawsuit arguing that the merger would still breach competition law by giving the combined company too much control over how films are distributed to cinemas and how cable channels are licensed. Individual states have their own legal powers to contest mergers, so this action can proceed even though the federal regulator has already signed off.
The outcome matters because it will shape how much choice and pricing power cinemas, TV distributors and ultimately viewers have, and it tests whether states can override a federal merger decision. Cinema owners have broadly supported the states' case, while Paramount maintains the deal will benefit consumers by creating a stronger competitor in streaming and film output.
More coverage
- The Hollywood Reporter — Paramount Sued By States In Bid to Block $111 Billion Warner Bros. Merger
- Deadline — California And 11 Other States Sue To Block Paramount-Warner Bros. Discovery Merger
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Originally published by Variety as “States Sue to Block Paramount-Warner Bros. Merger, Defying DOJ”.