A coalition of 12 US state attorneys general has filed a federal antitrust lawsuit to block Paramount Skydance’s proposed $110 billion acquisition of Warner Bros. Discovery (WBD). The legal challenge threatens to stall or derail the largest merger in Hollywood history.
Led by California Attorney General Rob Bonta, the coalition filed the lawsuit in the US District Court for the Northern District of California. Joining California are Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington.
The Threat to Hollywood and Consumers
The lawsuit alleges that merging the two giants violates the Clayton Act by drastically reducing competition. The combined entity would control nearly one-third of theatrical motion pictures and basic cable programming in the US. The deal would unite legacy film studios Paramount and Warner Bros., combine streaming platforms Paramount+ and HBO Max, and consolidate major TV networks like CBS, MTV, and BET with CNN and TNT.
At a press conference in front of the Hollywood sign, Bonta argued that the merger would drive up prices and reduce content variety. The coalition has asked the companies to pause the merger voluntarily. If they refuse, the states plan to seek a temporary restraining order.
The states’ action is backed by the Writers Guild of America (WGA) and Cinema United, both warning that studio consolidation will depress wages, reduce entertainment jobs, and harm local movie theaters.
Paramount’s Defense and High Financial Stakes
Paramount defended the transaction, calling the lawsuit a fundamental distortion of antitrust law and competitive realities. The company argues that the merger is necessary to build a creative-first entity capable of competing against dominant, tech-first platforms like Netflix.
The US Department of Justice recently cleared the merger, and global jurisdictions have largely approved it. However, the European Union’s review is ongoing, with a provisional deadline of July 22.
WBD shareholders approved the merger in April, and Paramount CEO David Ellison previously targeted a September close. A delay could be incredibly costly: if the transaction is not closed by September 30, a “ticking fee” kicks in, forcing Paramount to pay WBD shareholders an estimated $650 million in cash for every quarter the deal remains open.