CELAC News – A group of 12 U.S. states, led by California, filed a lawsuit on Monday in the U.S. District Court for the Northern District of California seeking to block Paramount Skydance Corporation’s roughly $111 billion acquisition of Warner Bros. Discovery. The legal challenge represents the biggest obstacle yet for what would be the largest merger in Hollywood history.
The states that joined the lawsuit are Arizona, California, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington. California Attorney General Rob Bonta, speaking at a press conference in front of the iconic Hollywood sign, said the illegal merger of the two entertainment giants would lead to higher prices, lower content quality, and fewer movies and television shows.
“Competition is the lifeblood of a healthy, vibrant economy. It pushes companies to do their best work, to constantly innovate, and to offer fair and reasonable prices,” Bonta said at the news conference. “In this country, no one is above the law. With this lawsuit, California and our sister states are fighting for a free and fair marketplace, not a rigged one.”
The complaint alleges that the merger violates Section 7 of the Clayton Act of 1914, which prohibits acquisitions that may substantially lessen competition or tend to create a monopoly. The California Attorney General’s office noted that if approved, the combined company would control nearly one-third of all theatrical film releases and nearly one-third of all cable television programming in the United States. In the nationwide wide-release motion picture distribution market, the two companies currently hold a combined share of approximately 27%.
The acquisition would also place two major news organizations — Warner Bros. Discovery’s CNN and Paramount Skydance’s CBS — under the same corporate umbrella. The complaint argues that the merger would weaken competition in areas such as theatrical film distribution, high-grossing movie releases, and licensing of cable television channels.
Paramount Skydance quickly responded to the lawsuit, calling it “fundamentally misguided in its interpretation of antitrust law and wrong on both the facts and the law.” The company said it would “vigorously defend the transaction and demonstrate that this challenge does not square with sound competition policy or the competitive realities of the media market.” Paramount also accused the states of a hidden attempt to protect streaming giants like Netflix.
Notably, President Trump has supported the deal. The U.S. Department of Justice gave the merger a “green light” last month, concluding that it would likely enhance rather than harm competition. Shareholders of Warner Bros. Discovery voted to approve the acquisition agreement on April 23, and the transaction was originally expected to close in the third quarter of 2026.
However, the deal has faced opposition from multiple fronts since its announcement. In addition to the 12-state antitrust lawsuit, the British government has also previously indicated it might challenge the transaction on media diversity grounds. Moreover, more than 5,000 Hollywood industry professionals have signed a petition against the acquisition. The California Attorney General’s office had already announced an investigation into the deal in February.
Bonta said the coalition has asked Paramount and Warner Bros. to suspend the merger pending judicial proceedings, adding that “if they do not agree, the coalition will seek a temporary restraining order.” If the transaction is delayed, Paramount Skydance could face a hefty cost — according to filings with U.S. securities regulators, if the merger is not completed by September 30, Paramount would have to pay shareholders a “ticking fee” of 25 cents per share, totaling approximately $650 million per quarter.
U.S. media widely believe that if the roughly $111 billion deal is ultimately completed, it would have profound implications across the U.S. entertainment, media, and other related industries.