Twelve US states are suing the Paramount-Warner merger

A coalition of twelve states, led by California, filed a federal lawsuit Monday to block Paramount Skydance's $110 billion acquisition of Warner Bros. Discovery, a deal already approved by the U.S. Department of Justice.

The lawsuit was filed in Oakland federal court. The plaintiff states argue that this merger, which would be the largest in Hollywood history, would violate antitrust law and lead to higher prices, lower quality, and a reduction in content available to viewers.

California Attorney General Rob Bonta, who is leading the lawsuit, called the merger of two of Hollywood's last five major studios "illegal." "Viewers on every couch and in every movie theater would feel the impact of this illegal merger," he said at a press conference. The complaint alleges that the combined company would capture more than a quarter of every dollar generated by the nation's wide-screen movies and cable television.

The deal would bring together two major production studios, two streaming platforms (HBO Max and Paramount+), and the news networks CNN and CBS News under a single ownership structure. Elected officials and unions in the industry fear job losses, a decline in film diversity, and further pressure on already expensive subscriptions.

Paramount rejected the states' arguments, asserting that the merger would instead create "a stronger competitor to the dominant streaming and technology platforms that have harmed the movie theater market."

The transaction had nonetheless received the green light from the Justice Department in June, without conditions. This approval itself raised political questions: Paramount CEO David Ellison is the son of Larry Ellison, co-founder of Oracle, a close associate of President Donald Trump and a major contributor to his election campaigns. "Something happened, and maybe that something had to do with a mega-billionaire named Ellison," declared Arizona Attorney General Kris Mayes. She also accused the Justice Department under Trump of "systematically bowing down to corporate consolidation."

The eleven other signatory states are Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington, all led by Democratic attorneys general. The White House had not immediately responded.

Paramount and Warner had hoped to finalize their agreement during the third quarter of this year. The merger is also subject to antitrust reviews outside the United States, particularly in Europe. The lawsuit filed by these states could jeopardize this timeline.