Paramount Skydance's proposed acquisition of Warner Bros. Discovery is now facing a new legal challenge. The Writers Guild of America, which represents American screenwriters, has filed a lawsuit in federal court to block the deal. The union argues that the merger would significantly reduce competition in Hollywood, eliminate jobs, and allow the new entity to exert pressure on writers' compensation.
The Writers Guild of America is calling for a halt to the acquisition.
The lawsuit was filed on Tuesday, July 14, 2026, in the U.S. District Court for the Northern District of California by the Eastern and Western chapters of the Writers Guild of America. The two organizations are asking the court to block the merger between Paramount Skydance and Warner Bros. Discovery on the grounds of federal antitrust law. The announced price for the acquisition is $81 billion for Warner Bros. Discovery's shares. Including the group's debt, the total value of the transaction approaches $111 billion. Paramount and Warner Bros. Discovery hope to close the deal during the third quarter of 2026. A completion date as early as July 22 was mentioned in the legal proceedings against the project. The Writers Guild believes that the disappearance of Warner Bros. Discovery as an independent employer would give the new entity a dominant position in the purchase of scripts and the production of films and television series. According to the lawsuit, the merged group would become the largest employer of screenwriters in the United States and the largest buyer of original programming for film and television.
Wages, jobs, and the number of productions are at the heart of the complaint.
The union argues that reducing the number of competing studios would allow Paramount-Warner to cut spending on writers. The complaint cites downward pressure on wages, deteriorating contractual terms, fewer hires, and increased difficulties for new screenwriters hoping to launch a long career in Hollywood. The Writers Guild also fears a decrease in the number of films and series produced each year. A group controlling multiple studios, television networks, and streaming services could reduce its orders without worrying that a direct competitor would immediately pick up the abandoned projects. Writers would then have fewer companies to pitch their scripts to or negotiate their contracts with.
The lawsuit specifically targets three markets in the audiovisual writing industry. It concerns screenwriters working on big-budget films likely to be box-office hits, writers employed on television series or streaming platforms, and screenwriters bound to a studio by an overall development contract. For film productions, the complaint specifically targets films with a budget of at least $100 million. The union asserts that Paramount and Warner Bros. Discovery are currently vying for the services of numerous writers in these three sectors. Their merger would therefore eliminate a major buyer. The Writers Guild also believes that this consolidation would facilitate tacit coordination among the remaining major studios to limit salaries and commissions.
Two historic studios united in the same group
The deal would unite two of the last five major Hollywood studios. The future entity would control Paramount Pictures, Warner Bros., CBS, CNN, HBO, MTV, Nickelodeon, Cartoon Network, and HGTV. It would also include the Paramount+ and HBO Max streaming platforms, as well as franchises such as Harry Potter, DC Comics, Mission: Impossible, and Top Gun. This consolidation would encompass film, cable channels, broadcast television, and streaming services. Opponents of the acquisition argue that the size of the new entity would give it considerable leverage over writers, independent producers, theater owners, and pay-TV distributors.
Paramount promises more films and two separate studios
Paramount rejects the union's accusations. The company maintains that the merger will, on the contrary, strengthen production and create more work for screenwriters. The group asserts its intention to retain two separate film studios and continue commissioning programs from independent production companies. Paramount has also committed to releasing at least 30 films per year in theaters, with an exclusive 45-day theatrical run. The company also anticipates approximately $6 billion in savings, primarily through the elimination of expenses deemed redundant in infrastructure, marketing, and administrative functions. Opponents of the project argue that promises regarding the number of films are insufficient to eliminate risks. They point out that a commercial commitment can be modified after the merger is completed and that the power of the new entity would extend far beyond the mere question of the annual number of theatrical releases.
Twelve US states are also attacking the operation
The screenwriters' lawsuit was filed the day after another lawsuit was filed by California and eleven other US states. This coalition is also seeking to block the acquisition, arguing that the combined entity could increase prices charged to movie theaters and television distributors while reducing the choices available to the public. The attorneys general have also requested a temporary restraining order and a preliminary injunction to prevent Paramount and Warner Bros. Discovery from finalizing the deal before a full review of the case. According to their complaint, the merged company would control 27% of the distribution of widely shown films in the United States, 30% of the market for blockbuster hits, and 27% of basic US cable channels. Paramount disputes these calculations and maintains that the lawsuits are based on a misrepresentation of how the industry currently operates. The company believes the merger is necessary to better compete with Netflix, Disney, and the major tech companies in the streaming market.
A finalization now threatened by several appeals
The project has already received approval from the U.S. federal government and several permits abroad, including in Canada, China, and Australia. However, reviews are still ongoing in the United Kingdom and the European Union. New legal challenges could delay completion for several months. Paramount has committed to paying approximately $650 million per quarter to Warner Bros. Discovery shareholders if the acquisition is not completed by October. A prolonged delay could also force the company to renegotiate its financing or revise certain terms of the agreement. The federal court must now decide whether the deal can be suspended before completion. The lawsuit filed by the screenwriters adds another obstacle to Paramount Skydance's project, which is already facing opposition from several states and some members of the American film industry.
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