12 States Sue to Block Paramount-Warner Bros. Discovery Merger

Twelve U.S. states filed a lawsuit on Monday in the United States District Court for the Northern District of California, seeking to block the proposed merger between Paramount Global and Warner Bros. Discovery (WBD). The coalition of state attorneys general, led by California Attorney General Rob Bonta, contends that the $110 billion deal raises significant antitrust concerns and would harm competition within the film distribution industry.

The lawsuit argues that combining Paramount and WBD, two of the nation's five major film distributors, would reduce the number of major players to four, thereby controlling over 85 percent of all wide-release theatrical films in the United States. This consolidation, the states allege, would lead to substantial harm for movie theaters, basic cable distributors, and ultimately, audiences nationwide. The legal challenge emerged after weeks of speculation regarding potential government intervention in the merger.

This legal action represents a new hurdle for the proposed merger, which had previously secured approval from both companies' shareholders and the U.S. Department of Justice. Earlier this year, Netflix had withdrawn its bid to acquire WBD, making way for the Paramount-Skydance offer, which was considered more attractive to WBD shareholders. The states involved in the lawsuit include Arizona, California, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington.