NEW YORK — Colorado and 11 other states challenged Paramount’s takeover of Warner Bros. Discovery on Monday, filing a lawsuit that argues the $81 billion mega-merger would “extinguish competition” in Hollywood and threaten jobs across the industry.
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The office of California’s attorney general, who is leading the case, said the states are asking Warner Bros. and Paramount to not close their merger “until after the judicial process concludes” — and if the companies do not agree, the coalition will then file a temporary restraining order.
“The unlawful merger of these two entertainment behemoths would lead to higher prices, lower quality, and less content for film and television, harming movie theaters, basic cable distributors, and ultimately, audiences on every sofa and movie theater seat in the U.S.,” Attorney General Rob Bonta said in a statement.
Paramount, which was bought by Skydance just last year, wants all of Warner. That would mean putting HBO Max, cult-favorite titles like “Harry Potter” and even CNN under the same roof with CBS, “Top Gun” and the Paramount+ streaming service.
The states’ lawsuit could throw a wrench in those plans, at least for now. The antitrust case arrives at a pivotal time for the Paramount-Warner transaction — which, after months of what became a very public bidding war, received shareholders’ stamp of approval in April and then a blessing from the Trump administration just last month.
“More concentration in motion picture production and in the cable network sectors threatens harm to consumers and to a robust marketplace of ideas,” Colorado Attorney General Weiser said in a statement. “As Colorado welcomes the Sundance Film Festival next year, we are acutely aware that preserving competition in the motion picture industry will help ensure the distribution of a wide variety of the best films to movie theatres.”
California and Colorado are joined in the lawsuits by the attorneys general of Arizona, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington.
The U.S. Justice Department isn’t challenging the deal — and instead released an unusually lengthy statement in support, maintaining a Paramount-Warner combo would “increase competition across the media and entertainment ecosystem, with benefits for American consumers and workers.”
Paramount has touted additional regulatory clearances it says it’s received in a handful of other countries, including China, Canada and Australia. But other reviews remain in progress, including in the European Union and the U.K. — which has separately suggested it may intervene.
Paramount and Warner previously said they hoped to close their deal sometime in the third quarter of this year, signaling recently an effort to complete the process in the coming weeks. The clock is ticking. Paramount pledged to give shareholders some compensation if the acquisition doesn’t close by Sept. 30 — in the form of a 25-cent per share “ticking fee” for every quarter past that date. It’s also agreed to a regulatory termination fee of $7 billion.
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Including debt, Paramount’s proposed purchase of Warner is valued at nearly $111 billion (or $31 per share) based on current outstanding shares.
Warner and Paramount argue that merging will be good for growth in the industry and give consumers access to more content, particularly if HBO Max and Paramount+ libraries are combined. But critics have decried what further consolidation could mean in an industry already controlled by just a few major players.
Thousands of actors, directors, writers and other industry professionals have voiced “unequivocal opposition” to the Paramount deal, arguing that further consolidation will lead to job losses and fewer choices for filmmakers and moviegoers. Many lawmakers have similarly sounded the alarm.
Democrats have expressed skepticism about whether regulators working under President Donald Trump would scrutinize the deal as heavily, with questions of political influence piling up.
The Justice Department maintained that politics would not play a role in the regulatory process — but Trump himself has publicly waded into Warner’s future at times, despite backpedaling on what he once suggested his personal role would be. The Republican president also has a close relationship with the Ellison family, particularly Oracle founder Larry Ellison, who is putting billions of dollars on the table to back the bid for his son’s company.
Many eyes are on CNN, a network that has long attracted ire from Trump and his allies.
Paramount’s CBS has already seen significant turmoil and shifts in editorial leadership since coming under Skydance ownership last — and if Warner merger goes through, the reach of that could grow. Several Trump administration officials have been far from shy from sharing their hopes for CNN under Paramount ownership, with Defense Secretary Pete Hegseth telling reporters in March that “the sooner David Ellison takes over that network, the better.”
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