California Attorney General Rob Bonta is leading a coalition of 12 states in a lawsuit to block Paramount Skydance Corporation’s $110 billion acquisition of Warner Bros. Discovery.
The legal challenge against Paramount’s acquisition of Warner Bros. Discovery, filed today in the U.S. District Court for the Northern District of California, argues the deal would combine two of Hollywood’s five major film distributors and two of the five major basic cable channel owners. If completed, the merged company would control nearly a third of theatrical motion picture distribution and nearly a third of basic cable programming in the U.S., according to a press release from the California Department of Justice. The coalition alleges the merger violates Section 7 of the Clayton Act, which prohibits mergers that substantially lessen competition or tend to create a monopoly.
“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 the press release. “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.”
The coalition has asked Paramount and Warner Bros. to hold off on closing the merger until the litigation concludes. If the companies decline, the states plan to file for a temporary restraining order.
Paramount and Warner Bros. have operated as independent rivals in film and television for more than a century. Paramount’s catalog includes Titanic, Braveheart, The Godfather, and franchises like Top Gun, Mission: Impossible, and Transformers. Warner Bros. has distributed films including Casablanca, The Matrix, Goodfellas, and Barbie, as well as franchises like Batman, Harry Potter, and The Lord of the Rings. On the television side, the companies’ holdings include CNN, MTV, HGTV, Cartoon Network, Nickelodeon, and broadcast rights to March Madness and Major League Baseball.
The lawsuit identifies three markets where the coalition says competition would suffer most. In wide-release theatrical film distribution, Warner Bros. and Paramount would combine for roughly 27% market share, leaving just three distributors in control of 75% of wide-release films and four distributors — the merged company, Disney, Universal, and Sony — controlling 86%. In anticipated top-grossing theatrical releases, a submarket covering high-budget blockbusters, the combined company would hold more than 30% share, with the same four distributors controlling over 90%. In basic cable channel licensing, Warner Bros. is currently the second-largest player and Paramount the third-largest; combined, they would hold about 27% of that market.
The coalition argues that this competition currently benefits both movie theaters and cable distributors directly. Theaters negotiate with Paramount and Warner Bros. separately for premium screens and release dates, and cable distributors negotiate with both companies for channel carriage rights, leverage that disappears if the two merge.
While the lawsuit centers on film and television distribution, the merger could carry some ripple effects for the gaming industry as well. Warner Bros. owns WB Games, the publisher behind franchises like Mortal Kombat, the Batman: Arkham series, and Hogwarts Legacy. The lawsuit itself doesn’t address gaming assets or antitrust concerns in that market, but a merger of this scale at the parent-company level is worth watching for any downstream effects on how those studios are funded, staffed, or positioned going forward.
Bonta’s legal challenge against the Paramount-Warner merger is now pending in federal court. Whether the litigation moves toward a preliminary injunction fight or a negotiated pause depends on whether Paramount and Warner Bros. agree to hold off on closing the deal while the suit proceeds.