California-led coalition sues to block Paramount’s $81 billion Warner Bros. Discovery acquisition

A coalition of 12 states led by California has sued to block Paramount’s $81 billion acquisition of Warner Bros. Discovery, arguing the deal would weaken competition in Hollywood and leave U.S. consumers with higher prices, fewer movies and TV shows, and lower-quality content. The complaint says combining Paramount and Warner would unite two of the last five legacy studios and give the merged company outsized influence over theatrical film distribution, basic cable programming, streaming and news assets including CBS, Paramount+, HBO Max and CNN. California Attorney General Rob Bonta said the merger would harm audiences, movie theaters and cable distributors, and the states are asking the companies not to close the transaction until the judicial process ends. If they refuse, the coalition plans to seek a temporary restraining order. Paramount said the lawsuit misstates antitrust law and argued the merger would create a stronger competitor to dominant streaming and technology platforms that have already disrupted theatrical exhibition and entertainment jobs. The legal challenge lands at a critical stage for the deal. The transaction won shareholder approval in April and clearance from President Donald Trump’s administration last month, while Paramount has said it recently received approvals in countries including China, Canada and Australia. Reviews are still under way in the European Union and the U.K. The companies had hoped to close in the third quarter, but delays beyond Sept. 30 would trigger a 25-cent-per-share quarterly ticking fee for Warner shareholders, and Paramount has also agreed to a $7 billion regulatory termination fee. Including debt, Paramount’s proposed purchase of Warner is valued at nearly $111 billion, or $31 per share based on current outstanding shares. The lawsuit also sharpens political scrutiny around the transaction. Democratic attorneys general challenging the deal criticized the Justice Department’s decision not to sue, while Republicans did not join the case. Critics, including the Writers Guild of America and other industry groups, say further consolidation could reduce jobs, wages and programming variety, while Paramount counters that blocking the merger would protect larger rivals such as Netflix from tougher competition.