Writers Guild of America<\/a> sued in federal court to stop the merger, saying it would lead to fewer jobs and lower pay for writers.<\/p>\nParamount, in a statement, blasted the lawsuit from the state attorneys general, saying it \u201creflects a fundamentally flawed application of the antitrust laws and is wrong on both the facts and the law.\u201d<\/p>\n
But the litigation poses a major headache for David Ellison, who wants to wrap up the deal by September to avoid making higher payouts to Warner Bros. Discovery shareholders and to manage escalating legal fees from a half-dozen law firms hired to help defend the merger. <\/p>\n
Paramount also faces a potential $7-billion payment to Warner Bros. should the company fail to close the transaction by next summer. Paramount is the smallest of the major media companies and acquiring Warner Bros. is key to David Ellison\u2019s ambitions to build a new Hollywood colossus. <\/p>\n
\u201cEach side is taking risks with this case,\u201d said Michael Morris, a senior managing director of Guggenheim Securities. \u201cThe states risk spending a lot of money and having their arguments rejected. And Paramount risks having a prolonged negotiation.\u201d<\/p>\n
Legal experts and Wall Street analysts have pored over the states\u2019 37-page federal antitrust suit since it was filed in Northern California early Monday, looking for clues to determine whether the prosecutors have a path to derail the biggest Hollywood deal in decades.<\/p>\n
\u201cThis is a strong case,\u201d said Abiel Garcia, a partner at the law firm Kesselman Brantly Stockinger in Manhattan Beach and a former California state prosecutor. <\/p>\n
\u201cThere isn\u2019t a lot of fluff to it,\u201d Garcia said. \u201cThey made the right call of not really getting into the politics behind the deal … and instead focused on the facts of the case.\u201d <\/p>\n
The states\u2019 case hinges on whether a judge will accept the market definitions outlined in their lawsuit, Garcia and other analysts said. Prior cases have set thresholds for industry concentration allowable under U.S. antitrust law. <\/p>\n
Prosecutors contend that the Paramount deal would reach and, in some cases, exceed established thresholds, constituting violations of the century-old Clayton Antitrust Act that was adopted to protect markets and consumers.<\/p>\n
\u201cThe most important topic to be decided is how do you define market power?\u201d Morris said. <\/p>\n
In the lawsuit, the prosecutors defined the market narrowly. Instead of painting a broad picture that included all leading forms of content distribution \u2014 movie theaters, broadcast and cable television as well as streaming platforms \u2014 the states zeroed in on three distinct slices.<\/p>\n
The states identified wide-release films, big-budget blockbusters and the concentration of pay-TV channels as the three markets to test in the litigation.<\/p>\n
A combined Paramount-Warner Bros. would have more than 50 cable channels, including TBS, HGTV, Animal Planet, MTV, Comedy Central, Cartoon Network and Food Network. That would leave just two companies \u2014 Walt Disney Co. and Paramount-Warner \u2014 owning nearly 60% of U.S. pay-TV channels, giving them huge sway during carriage negotiations with pay-TV companies such as YouTube TV and Charter Spectrum. <\/p>\n
Over the last four years, five studios \u2014 Disney, Universal, Sony, Warner Bros. and Paramount \u2014 have accounted for about 95% of all anticipated top-grossing theatrical films, according to the lawsuit.<\/p>\n
\u201cThis merger would reduce that number to four,\u201d the lawsuit said, adding that two companies \u2014 Disney and Paramount-Warner Bros. \u2014 would control 60% of the potential blockbuster film market, giving them power to squeeze movie theaters and forcing them to charge consumers more to watch their movies.<\/p>\n
Paramount and others have criticized the states\u2019 case because prosecutors bypassed the increasingly important streaming business as part of their market definition. <\/p>\n
Paramount-Warner Bros. would still lag behind Google\u2019s YouTube, Netflix, Disney and Amazon in streaming television viewership. <\/p>\n
\u201cIt\u2019s not uncommon to try to define the market as narrowly as possible,\u201d Syracuse University law professor Shubha Ghosh said in an interview.<\/p>\n
\u201cBut courts have been a bit more sensitive to this issue, and sometimes judges question whether [plaintiffs] have the right definition of the market,\u201d Ghosh said.<\/p>\n
Paramount says the case appeared designed to help streaming companies, including Netflix, avoid a more potent competitor.<\/p>\n
\u201cThe combination of Paramount and WBD will create a stronger, well-capitalized, creative-first media company that is better positioned to compete with companies like Netflix that have come to dominate the industry for audiences, premium content, and creative talent,\u201d Paramount said. <\/p>\n
Paramount is expected to argue that the states erred by not including streaming as part of the market definition.<\/p>\n
\u201cThe streaming part of the environment is the highest growth part of the industry,\u201d Morris said. \u201cBox office is not really growing and cable networks are contracting, as we all know, with cord-cutting.\u201d<\/p>\n
The states highlighted the potential harm to moviegoing business by emphasizing wide-release film distribution. Paramount-Warner Bros. would control about 27% of that business \u2014 near the established threshold for antitrust concerns. <\/p>\n
Just four companies \u2014 Paramount-Warner, Disney, NBCUniversal and Sony Pictures \u2014 would own 86% of the films that are widely released \u2014 in more than 3,000 movie theaters. <\/p>\n
Paramount says the deal will boost competition. David Ellison has promised that the combined studio would continue releasing about 30 films a year, <\/a> roughly the combined output of the two studios currently.<\/p>\nBonta is not convinced.<\/p>\n
\u201cWe give little credit to the claims of David Ellison,\u201d Bonta said during Tuesday\u2019s town hall with a group of industry workers and activists who launched the #BlocktheMerger campaign in the spring. <\/p>\n
\u201cIt\u2019s something that is being said seemingly to help get support behind the proposed merger \u2014 but it\u2019s completely unenforceable,\u201d Bonta said. \u201cHistory shows it was just not going to happen.\u201d<\/p>\n
In light of the legal tussle with California, some have encouraged David Ellison to ditch Paramount\u2019s Hollywood headquarters in favor of Tennessee. That state\u2019s deputy governor pitched the mogul on such a move, writing: \u201cFor generations, Tennessee has been one of America\u2019s most business-friendly states,\u201d according to the July 2 letter viewed by The Times<\/p>\n
Joining California in the fight are state attorneys general from New York, Arizona, Colorado, Nevada, Washington, Oregon, New Mexico, New Jersey, Minnesota, Connecticut and Massachusetts.<\/p>\n
Bonta and the other state attorneys general been sharply critical of Trump\u2019s Justice Department for waving through the Paramount merger and for withdrawing from a New York trial, which ultimately resulted in a jury verdict that Live Nation Entertainment had unlawfully monopolized primary ticketing services and amphitheaters, a huge victory for the state attorneys general.<\/p>\n
The states eventually may have to demonstrate that the Justice Department should not have approved the Paramount-Warner merger. <\/p>\n
Two dozen other regulators, including in Canada, Australia, China, Saudi Arabia and Ukraine, have cleared the Paramount deal. However, two key jurisdictions \u2014 the European Commission and Britain\u2019s media and culture minister \u2014 continue to evaluate potential anticompetitive effects.<\/p>\n
\u201cThere\u2019s a good set of eyeballs on this deal, looking at a broad and diverse set of important issues,\u201d Bonta said. \u201cWith all of the different regulators inspecting the proposed merger … I think it helps with a more robust analysis.\u201d<\/p>\n<\/p><\/div>\n
\u2018 The preceding article may include information circulated by third parties \u2019 <\/em><\/p>\n \u2018 Some details of this article were extracted from the following source www.latimes.com \u2019 <\/em><\/p>\n","protected":false},"excerpt":{"rendered":"California Atty. Gen. Rob Bonta\u2019s big swing \u2014 leading a coalition of 12 state attorneys general to try to block Paramount Skydance\u2019s $111-billion takeover of Warner Bros. Discovery \u2014 could reverberate through the entertainment business for years to come. Late Monday, Bonta\u2019s coalition of Democratic prosecutors asked a federal judge to grant a temporary restraining […]<\/p>\n","protected":false},"author":2,"featured_media":2503439,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"jnews-multi-image_gallery":[],"jnews_single_post":[],"jnews_primary_category":[],"jnews_social_meta":[],"footnotes":""},"categories":[25172],"tags":[],"class_list":["post-2503438","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-entertainment"],"jetpack_featured_media_url":"https:\/\/celebrity.land\/en\/wp-content\/uploads\/2026\/07\/Inside-the-states-case-to-block-the-Paramount-Warner-Bros-merger.com2Fcd2F462F84772ba34fc9bb3f4a5b683a.jpeg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/celebrity.land\/en\/wp-json\/wp\/v2\/posts\/2503438","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/celebrity.land\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/celebrity.land\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/celebrity.land\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/celebrity.land\/en\/wp-json\/wp\/v2\/comments?post=2503438"}],"version-history":[{"count":1,"href":"https:\/\/celebrity.land\/en\/wp-json\/wp\/v2\/posts\/2503438\/revisions"}],"predecessor-version":[{"id":2503440,"href":"https:\/\/celebrity.land\/en\/wp-json\/wp\/v2\/posts\/2503438\/revisions\/2503440"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/celebrity.land\/en\/wp-json\/wp\/v2\/media\/2503439"}],"wp:attachment":[{"href":"https:\/\/celebrity.land\/en\/wp-json\/wp\/v2\/media?parent=2503438"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/celebrity.land\/en\/wp-json\/wp\/v2\/categories?post=2503438"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/celebrity.land\/en\/wp-json\/wp\/v2\/tags?post=2503438"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}