A coalition of 12 states filed federal antitrust lawsuit on Monday in an effort to block the proposed $110 billion merger between Paramount Skydance and Warner Bros. Discovery. The legal challenge, filed in the U.S. District Court for the Northern District of California, directly defies the Department of Justice, which approved the transaction last month.
Led by California Attorney General Rob Bonta, the coalition alleges that the massive entertainment merger violates Section 7 of the Clayton Act. The lawsuit contends the deal would substantially lessen competition across three areas: wide-release theatrical distribution, “top-grossing” blockbuster theatrical distribution, and basic cable television licensing. According to the complaint, the combined company would control 27% of the theatrical distribution market, over 30% of anticipated blockbuster releases, and more than one-quarter of basic cable bundle licensing.
In a public statement, Bonta warned that consolidating two of Hollywood’s five remaining legacy film studios would restrict market variety, reduce job opportunities, and lead to higher pricing for basic cable distributors, theaters, and consumers. The states joining California in the lawsuit are Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington.
The legal challenge received strong support from major industry organizations. Cinema United, a trade group representing theater owners, praised the attorneys general for challenging the acquisition, citing concerns over long-term theatrical consolidation. Leadership from both the Writers Guild of America West (WGAW) and Writers Guild of America East (WGAE) also applauded the lawsuit, warning that the transaction threatens union jobs and industry compensation structures.
In response, a spokesperson for Paramount Skydance defended the deal, characterizing the lawsuit as a flawed application of antitrust law. Paramount CEO David Ellison has previously maintained that the combined entity would expand production to release at least 30 films annually, offering a stronger streaming alternative to competitors like Netflix and Amazon.
The coalition has requested that Paramount and Warner Bros. pause the transaction until the judicial challenge is resolved. If the companies’ proceed with their timeline to close the deal, the states plan to file a temporary restraining order to block the transition.
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