Twelve state attorneys general have filed a lawsuit to halt the proposed $110 billion merger between Paramount and Warner Bros. Discovery, citing fears of increased movie ticket prices and reduced competition in the cable television market.
The coalition includes California, Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington. The states argue the merger would unlawfully consolidate two of the five major film distributors and cable channel operators, creating a dominant entity that could capture over 25% of industry revenue. This follows the Justice Department’s earlier decision not to challenge the merger, which reportedly surprised internal staff. Former DOJ antitrust official Omeed Assefi disputed claims of internal disagreement, stating the characterization was inaccurate.
“For every dollar generated by wide-release theatrical films and basic cable channels in this country, the combined company will pocket more than a quarter.”
Paramount dismissed the lawsuit as “based on a misrepresentation of competition in the entertainment industry today,” adding that delays could negatively impact consumers and entertainment professionals. Concerns have also emerged regarding CNN’s potential integration under David Ellison, son of Trump ally Larry Ellison, with reports of declining viewership following Bari Weiss’s appointment as network head.
The legal challenge could cost Paramount significantly if the deal misses its September 30 closing deadline, triggering a $650 million quarterly payment to WBD shareholders.