California Attorney General Rob Bonta on Monday spearheaded a coalition of 12 state attorneys general in filing suit to block Paramount Skydance's proposed $110 billion acquisition of Warner Bros. Discovery, asserting the transaction would unlawfully diminish competition across the U.S. film and television markets.
The complaint, lodged in the U.S. District Court for the Northern District of California, accuses the merger of violating Section 7 of the Clayton Act by substantially lessening competition in two core areas: distribution of wide-release theatrical films and the market for licensing basic cable television channels.
As part of its request, the coalition has urged the companies not to close the deal while the judicial review is pending and warned it would seek a temporary restraining order if the firms proceed before the court has ruled.
In detail, the states say the combined company would command roughly 27% of the U.S. market for wide-release theatrical films and would account for more than 30% of anticipated blockbuster releases. The complaint further alleges the merger would join the second- and third-largest operators in basic cable licensing, producing a combined share of about 27% in that market segment.
Attorney General Bonta said the transaction would produce a range of competitive harms, including higher prices, lower-quality programming and diminished volume of content available to consumers. The lawsuit also contends the consolidation would weaken incentives to invest in creative projects and would reduce the diversity of films and television programming that audiences can access.
The coalition includes the attorneys general of Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington, making the action one of the broadest state-led antitrust challenges to a media merger in recent years.
The filing represents a significant escalation in regulatory scrutiny of what would be the largest merger in Hollywood history, and it threatens to delay or potentially derail the deal by asking a federal court to evaluate whether the combination unlawfully concentrates market power in pivotal content and distribution channels.
Markets and companies mentioned:
- Warner Bros. Discovery (WBD)
- Paramount Skydance (PSKY)
The suit focuses narrowly on alleged anticompetitive effects in theatrical distribution and basic cable licensing as laid out in the complaint, and it seeks judicial relief to preserve competitive conditions while the case proceeds.