California leads states in bid to block Paramount Skydance-Warner Bros. Discovery merger

California Attorney General Rob Bonta led a coalition of 12 attorneys general on Sunday in filing suit in federal court to block Paramount Skydance’s proposed $110 billion acquisition of Warner Bros. Discovery. The case was filed in the U.S. District Court for the Northern District of California.

The complaint says the merger would be the largest in Hollywood history and would combine two of Hollywood’s five major film distributors with two of the five major basic cable channel owners. The merged company would control nearly one-third of theatrical motion pictures and nearly one-third of basic cable programming in the United States.

The deal would squeeze competition for movie theaters, basic cable distributors and audiences nationwide, leaving fewer choices and weaker bargaining power across the entertainment supply chain. The suit seeks to prevent higher prices, lower quality and less content for film and television. The states also asked Paramount Skydance and Warner Bros. Discovery not to close the transaction while the case is pending and said they would seek a temporary restraining order if needed.

The U.S. Department of Justice already signed off on the transaction, clearing the way for state attorneys general to challenge it. Paramount said it would vigorously defend the deal and called the lawsuit a misreading of competition in entertainment today, while warning that any delay could hurt entertainment workers and California jobs.

State attorneys general have enforced antitrust laws since the 19th century, and their efforts expanded sharply after 1990 with the creation of the NAAG Multistate Antitrust Task Force. Almost every state has its own antitrust laws in addition to federal statutes.