Twelve US states sue to block Paramount's Warner Bros takeover

They term largest merger in Hollywood history a threat to competition in film, television

LOS ANGELES:

California and 11 other US states on Monday sued to block Paramount Skydance's $110 billion takeover of Warner Bros. Discovery, calling the largest merger in Hollywood history a threat to competition in film and television.

The lawsuit, filed in federal court in northern California, marks a dramatic turn in the regulatory battle over the deal -- and a direct challenge to the Trump administration's Justice Department, which approved the merger last month without requiring any divestitures or concessions.

California Attorney General Rob Bonta, who is leading the coalition, said the combination of two of Hollywood's five major film distributors would lead to "higher prices, lower quality, and less content" for audiences.

"In this country, no one is above the law," Bonta said. "California and our sister states are fighting for free and fair markets, not rigged markets. America has no kings in government or our economy."

The states allege the deal violates the Clayton Act, the federal law that bars mergers likely to substantially reduce competition.

The democratic led states joining California in the suit are Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington.

According to the complaint, the combined company would control roughly 27 percent of wide-release theatrical film distribution and about 27 percent of basic cable channel licensing.

The coalition has asked the companies not to close the transaction until the legal challenge is resolved, and warned it would seek a temporary restraining order if they refuse.

Paramount last month secured the green light of federal antitrust authorities, handing a major win to a media empire financed by one of President Donald Trump's closest billionaire allies.

The approval was a coup for Paramount chief executive David Ellison, whose father, Oracle co-founder Larry Ellison, largely financed the takeover.

The elder Ellison, one of the world's richest men, is a close ally of Trump.

The combined company would control a sprawling roster of assets, including CNN, Warner Bros. Pictures and the HBO Max streaming service.

Hundreds of actors and directors have signed a letter opposing the merger, warning it would choke production in an industry already battered by years of consolidation and cost-cutting.

The takeover saga began last year, when streaming giant Netflix and Paramount went to war over Warner Bros. and its prized back catalog.

A wary Tinseltown reluctantly lined up behind Netflix as the lesser of two evils, only to watch Paramount keep raising its bid until the streamer walked away.

The European Commission, the European Union's antitrust watchdog, has given itself until July 22 to decide on the acquisition.

Paramount Skydance was formed on August 7, 2025, by David Ellison, through the merger of Paramount Global, National Amusements, and Skydance Media. The company trades under the ticker symbol "PSKY" on the Nasdaq.

The evaluation of the Paramount Skydance merger by U.S. regulators was affected by Donald Trump becoming president for a second term. At the time, Trump was in an on-going lawsuit with CBS, one of Paramount's properties, alleging that CBS News's reporting amounted to election interference; lawyers widely described the lawsuit as baseless. Nevertheless, in July 2025, Paramount paid $16 million to settle the CBS-Trump lawsuit to ensure that the FCC, headed by Trump-appointed Brendan Carr, would not block the merger. Controversially, Paramount also chose not to renew The Late Show with Stephen Colbert after Colbert referred to the settlement on-air as a "big fat bribe", while denying that the non-renewal was motivated by his statements. After the merger's completion, David Ellison made conservative-friendly changes to CBS News, including acquiring political commentator Bari Weiss' website The Free Press, and hiring her as CBS News's inaugural editor-in-chief. Trump praised the decisions to hire Weiss and to cancel The Late Show.

Shortly after its formation, Paramount Skydance began pursuing an unsolicited bid to acquire Warner Bros. Discovery. Paramount Skydance's purchase of WBD was approved by the U.S. Department of Justice on June 12, 2026.