California AG leads coalition to block $110B Warner Bros.-Paramount merger

California Attorney General Rob Bonta filed a lawsuit seeking to block the proposed $110 billion acquisition of Warner Bros. Discovery, Inc. by Paramount Skydance Corporation, leading a coalition of 12 state attorneys general in the action.

The lawsuit, filed in the U.S. District Court for the Northern District of California, alleges the merger would violate Section 7 of the Clayton Act by substantially lessening competition in theatrical film distribution and basic cable television channel licensing.

According to the filing, the combined entity would control approximately 27% of wide-release theatrical film distribution, with four distributors — the merged company, Disney, Universal, and Sony — controlling 86% of that market. In anticipated top-grossing film distribution, the merged company would hold more than 30% market share, with four studios controlling more than 90%. In basic cable channel licensing, Warner Bros. and Paramount rank second and third respectively and would combine for a 27% share.

"The unlawful merger of these two entertainment behemoths would lead to higher prices, lower quality, and less content for film and television, harming movie theaters, basic cable distributors, and ultimately, audiences on every sofa and movie theater seat in the U.S.," Attorney General Bonta said in a statement.

The coalition has asked the two companies not to close the merger until after the judicial process concludes, and said it would seek a temporary restraining order if the companies do not agree.

Joining California in the lawsuit are the attorneys general of Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington.

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