12 states challenge the Paramount-Warner merger

Twelve states sued to block Paramount’s takeover of Warner Bros. Discovery on Monday, arguing that the $81 billion merger would “extinguish competition” in Hollywood and lead to fewer choices for consumers across the U.S.

“Audiences on every sofa and in every movie (theater) seat would feel the impact of this unlawful merger,” California Attorney General Rob Bonta, who is leading the case, said in a news conference from Los Angeles. He said the deal would result in higher prices, fewer movies and TV shows and lower quality of content overall.

A Paramount-Warner combo would bring together two of Hollywood’s last five legacy studios. It would also mean putting Warner’s HBO Max, libraries filled with fan favorites like “Harry Potter” and even CNN under the same roof of Paramount-owned CBS and the Paramount+ streaming service.

In Monday’s complaint, the states said such a tie-up would also “inflict substantial harm” on movie theatres and basic cable distributors. Bonta’s office said the states are asking Warner and Paramount to not close this merger “until after the judicial process concludes.” And if the companies do not agree, the coalition would then file a temporary restraining order.

Paramount said Monday’s lawsuit “distorts settled antitrust law” and maintained that its merger would instead create a “stronger competitor against dominant streaming and technology platforms who have harmed the market for theatrical exhibition and jobs in the entertainment industry.”

The company, which was bought by Skydance just last year, vowed to “vigorously defend” the transaction.

Warner deferred to Paramount for comment. Beyond California, states joining Monday’s lawsuit include Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington.

-AP News