A coalition of twelve state attorneys general has filed a lawsuit to block the proposed $110 billion merger between Paramount and Warner Bros Discovery, warning that the combination would raise movie prices and crush cable TV distributors across the United States.
The states — California, Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington — submitted their legal challenge on Monday. The coalition argues that bringing the two entertainment companies together would illegally harm competition and create what they termed a "media behemoth" with outsized influence over the industry.
States Argue Merger Would Concentrate Market Power
Central to the states' case is the assertion that the merger would consolidate two of the five major film distributors and basic cable channel owners operating in the United States. The lawsuit states that this concentration would be so significant that "for every dollar generated by wide-release theatrical films and basic cable channels in this country, the combined company will pocket more than a quarter."
The attorneys general contend that this level of market consolidation would directly impact consumers through higher movie prices and would leave cable TV distributors in a weakened position. By combining the resources of both companies, the merged entity would wield considerable leverage, the states argue.
Paramount responded to the lawsuit with a press release describing the legal action as "based on a misrepresentation of competition in the entertainment industry today." The company further argued that delaying the merger would harm consumers and entertainment talent.
Justice Department Declined to Intervene
The states' legal challenge comes after the U.S. Justice Department decided last month not to block the merger. According to reporting by The Wall Street Journal, that decision surprised career staff at the agency, who had reportedly been leaning toward recommending a lawsuit to stop the deal.
Former DOJ acting antitrust chief Omeed Assefi disputed that account during an exit interview with Politico, describing the Wall Street Journal report as "not accurate." The conflicting narratives surrounding the Justice Department's decision have added to the scrutiny surrounding the merger.