12 States Just Sued To Block the Warner Bros. And Paramount Merger, and the Fight Just Got Real

Media mergers rarely play out quietly, but few deals in recent memory have generated quite as much sustained controversy as Paramount Skydance’s push to acquire Warner Bros. Discovery.

What started as a $110 billion deal cleared by federal regulators has now run headfirst into a coordinated legal challenge from state governments, setting up one of the biggest antitrust fights the entertainment industry has seen in years.

The merger first won approval from Warner Bros. Discovery shareholders back in April, after Paramount offered $31 per share for the company. Since then, the deal has cleared regulatory review in numerous countries, including Australia, Canada, China, and New Zealand, and the Department of Justice gave its own blessing to the transaction in June, arguing the combination would not harm competition across theatrical, streaming, or linear television markets.

That federal approval did not settle the matter. A coalition of 12 states has now filed a lawsuit seeking to block the merger entirely, with the group made up of Arizona, California, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington. The suit was filed Monday in the Northern District of California and represents the sharpest legal challenge the deal has faced so far.

California Attorney General Rob Bonta, who is leading the coalition, said the merger would combine 2 entertainment behemoths in a way that would lead to higher prices, lower quality, and less content for film and television, harming movie theaters and cable distributors alike, speaking in a statement about the lawsuit.

New York Attorney General Letitia James echoed that framing in her own statement, arguing the deal would combine 2 of the 5 major film studios and 2 of the 5 major basic cable companies into a single conglomerate with outsized influence over entertainment worldwide.

The lawsuit’s core argument centers on 3 specific markets, wide release theatrical distribution, top grossing blockbuster distribution, and basic cable licensing, with the coalition alleging the merger violates the Clayton Act by significantly reducing competition in each. According to the filing, the 5 major studios, including Disney, Sony, and Universal alongside the newly combined entity, already control 86% of theatrical distribution and 90% of blockbuster distribution, numbers the states argue make further consolidation especially dangerous for audiences and industry workers alike.

Paramount has pushed back firmly against the lawsuit, with the company stating it continues to engage constructively with remaining regulators, including state attorneys general, and remains prepared to address any legitimate antitrust concerns. Paramount attorney Jeffrey Kessler was more pointed in his criticism, telling Variety that the challenge does not make much sense given that the deal would lead to more production and better jobs for talent based in California and beyond.

Hollywood labor groups have largely sided with the states, with Writers Guild of America West president Michele Mulroney calling it one of the worst proposed mergers the industry has seen in a statement applauding the lawsuit. Press freedom advocacy group Reporters Without Borders also voiced support for the legal challenge, raising concerns about how the deal could affect journalism given Warner Bros. Discovery’s ownership of CNN.

With the merger currently on track to close by the end of the third quarter and a European Commission decision still pending later this month, this lawsuit adds a genuinely significant obstacle to a deal that had appeared close to crossing the finish line. Whatever the outcome, the case is shaping up to be a defining test of how much power state regulators still hold over major media consolidation even after federal approval has already been granted.

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