12 states file lawsuit seeking to block Warner Bros.-Paramount merger

Ireland Owens, DCNF

A dozen state attorneys general filed a lawsuit Monday in an effort to block Paramount Skydance’s acquisition of Warner Bros. Discovery.

Democratic California Attorney General Rob Bonta alleged in the lawsuit that the proposed merger “would combine two of Hollywood’s five major film distributors and two of the five major basic cable channel owners, extinguishing competition between Paramount and Warner Bros., and inflicting substantial harm on movie theaters, basic cable distributors and, ultimately, audiences nationwide.” The states have requested that Warner Bros. and Paramount do not “close the merger until after the judicial process concludes, and if they do not agree, the coalition will be filing a temporary restraining order,” per the press release.

“Today, I am leading a coalition of states in challenging the proposed merger of Warner Bros. and Paramount and asking the court to block the deal,” Bonta said in a statement. “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.”

“California’s film and entertainment industry touches the lives of Americans daily — it comes into the living rooms of families, has a starring role in many young people’s first dates, and is a point of immense pride and employment for Californians up and down our state,” Bonta continued. “Consolidation here not only leads to higher prices — it also leads to fewer opportunities for important stories to come to life, and fewer ways for audiences to encounter stories, ideas, and perspectives beyond their own experiences. In this country, no one is above the law. With this lawsuit, California and our sister states are fighting for free and fair markets, not rigged markets.”

When reached for comment, Bonta’s office referred the Daily Caller News Foundation to its press release from Monday. Warner Bros. and Paramount each did not immediately respond to the DCNF’s request for comment.

“The merger combines two of the nation’s five major film distributors, leaving only four to control over 85 percent of all wide-release theatrical films in the United States,” according to the lawsuit. “It combines two of the five major owners of basic cable channels, leaving only two (the combined company and Disney) to control 59 percent of all basic cable in the United States. After this merger, 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. This merger, in short, would create a media behemoth.”

The states also allege in the lawsuit that U.S. movie theaters in particular “will pay the price” of the merger.

“With fewer film distributors, theatres will likely be forced to pay the remaining distributors a greater split of their revenues,” the lawsuit says. “Theatres will likely face more onerous caps on discounts and on the number of complimentary tickets they can offer viewers. And theatres will likely receive fewer new releases from distributors, who will face less competition and therefore have less incentive to invest in new, creative, and distinctive theatrical films.”

“Neither new entry nor expansion by existing competitors will replace the substantial competition eliminated by the merger,” the lawsuit claims.

The coalition of states suing to halt the merger alongside California includes Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington.

“Nothing justifies these substantial harms to competition,” per the lawsuit.

In June, the Department of Justice’s Antitrust Division approved Paramount’s acquisition of Warner Bros. Discovery. Some critics have notably claimed the merger could lead to issues such as sweeping layoffs, Politico reported.

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