A coalition of 12 states, led by California, filed a lawsuit on Monday in the U.S. District Court for the Northern District of California to block Paramount's acquisition of Warner Bros. Discovery. The lawsuit alleges that the merger would lead to higher prices, reduced content quality, and less variety for consumers in the film and television sectors. California Attorney General Rob Bonta stated the deal could negatively impact movie theaters, cable distributors, and domestic audiences by reducing competition.
Paramount defended the merger in a statement, asserting that the legal challenge is based on an incorrect interpretation of antitrust law and facts. The company warned that delaying the transaction would harm entertainment industry workers who have already faced job losses due to technological disruptions. The proposed $111 billion deal includes financing from sovereign wealth funds in Saudi Arabia, Qatar, and the United Arab Emirates, and would involve the company assuming $80 billion in new debt.
The acquisition would combine major industry assets, including movie studios, streaming services Paramount+ and HBO Max, and news divisions CBS News and CNN. The merger would place these entities under the control of Larry and David Ellison. The states joining California in the legal action include Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington.