EL SEGUNDO, Calif. — California Attorney General Rob Bonta is leading a coalition of 12 attorneys general in filing a lawsuit challenging the $110 billion acquisition of Warner Bros. Discovery, Inc. by Paramount Skydance Corporation.
What You Need To Know
- The proposed merger would combine two of Hollywood’s five major film distributors and two of the five major basic cable channel owners
- The coalition has asked Warner Bros. and Paramount not to close the merger until after the judicial process concludes
- The lawsuit was filed in the U.S. District for the Northern District of California
- Last month, an investigation by the DOJ determined that the merger is not likely to harm competition in the industry
The proposed merger would combine two of Hollywood’s five major film distributors and two of the five major basic cable channel owners.
The coalition has asked Warner Bros. and Paramount not to close the merger until after the judicial process concludes. And if they do not agree, the coalition will file a temporary restraining order, according to the California attorney general’s office.
“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 Monday. “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. 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. America has no kings in government or our economy.”
The lawsuit — filed in the U.S. District for the Northern District of California — alleges that the merger violates Section 7 of the Clayton Act, which holds that mergers that may substantially lessen competition or tend to create a monopoly are illegal. The attorneys general allege that if Warner Bros. and Paramount are allowed to merge, it would lessen competition in the areas of:
- Wide Release Theatrical Film Distribution, where Warner Bros. and Paramount are two of the five major film distributors and would combine for around 27% share of the market. After the merger, only three distributors will control 75% of these films and only four distributors (Defendants, Disney, Universal and Sony) will control 86% of them.
- Anticipated Top-Grossing Theatrical Film Distribution, a submarket of theatrical film distribution focused on anticipated blockbuster films with wide audiences and large production budgets. After the merger, Defendants will control more than 30% of these films, and four distributors (Defendants, Disney, Universal and Sony) will control more than 90% of them.
- Licensing Basic Cable Television Channels, or the market for distributing basic cable channels to cable and satellite providers. Warner Bros. is the second largest and Paramount is the third largest in this market, and they would combine for a 27% share.
Last month, an investigation by the U.S. Justice Department into Paramount Skydance’s proposed acquisition of Warner Bros. Discovery determined that the merger is not likely to harm competition in the industry or be harmful for consumers.
‘ The preceding article may include information circulated by third parties ’
‘ Some details of this article were extracted from the following source spectrumlocalnews.com ’
