Paramount Skydance’s proposed acquisition of Warner Bros. Discovery (WBD) has faced a setback as a judge has temporarily paused the deal following a lawsuit by a coalition of 12 state attorneys general. U.S. District Judge Araceli Martínez-Olguín issued a 14-day pause after hearing arguments from both sides last week.
The lawsuit, led by California Attorney General Rob Bonta, posits that the merger would harm competition in movie theaters, basic cable distribution, and audiences. The coalition may seek an additional pause after the initial 14 days, potentially delaying the merger further.
The states allege that the proposed deal would weaken competition in three specific areas: wide release theatrical film distribution, top-grossing theatrical distribution, and basic cable licensing. “This is a critical first win in our case to ensure this megamerger never sees the light of day,” Attorney General Bonta stated in a release. He emphasized the need for a free market to avoid diminishing opportunities and quality in consumer services.
The merger would combine Paramount’s film studios and streaming platform Paramount+ with WBD’s HBO Max and television networks, including CBS, MTV, CNN, and HBO. Paramount expressed confidence in the legality of the merger, asserting that the claims of the state attorneys general lack merit. A spokesperson said, “We are confident the evidence will demonstrate that the State AGs’ antitrust arguments are without merit.”
Paramount CEO David Ellison indicated previously that the transaction was expected to close by September. This legal obstacle could impede Paramount’s ambitions to compete with major players like Netflix.
The proposed acquisition has also drawn criticism from filmmakers, actors, and industry professionals who are concerned about increased consolidation in the media landscape. Warner Bros. Discovery did not respond to requests for comment regarding the lawsuit and its implications.
