12 U.S. states sue to block Paramount Skydance’s $110 billion Warner Bros. Discovery merger

LOS ANGELES, United States (AFP)—California and 11 other US states on Monday sued to block Paramount Skydance's $110 billion takeover of Warner Bros. Discovery, calling the largest merger in Hollywood history a threat to competition in film and television. The lawsuit, filed in federal court in northern California, marks a dramatic turn in the regulatory battle over the deal -- and a direct challenge to the Trump administration's Justice Department, which approved the merger last month. The combined company -- which came about after Netflix bowed out of the battle to own Warner -- would control a sprawling roster of assets, including CNN, Warner Bros. Pictures and the HBO Max streaming service. The saga has become politically charged, with President Donald Trump publicly saying he would weigh in on the deal as the fate of CNN -- a frequent target of the president's ire -- hangs in the balance. California Attorney General Rob Bonta, who is leading the coalition, said the combination of two of Hollywood's five major film distributors would lead to "higher prices, lower quality, and less content" for audiences. "In this country, no one is above the law," Bonta said. "California and our sister states are fighting for free and fair markets, not rigged markets. America has no kings in government or our economy." The states, all led by Democrats, allege the deal violates the Clayton Act, the federal law that bars mergers likely to substantially reduce competition. Joining California in the suit are Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington. Paramount fired back, calling the lawsuit "fundamentally flawed." "The practical effect of this lawsuit is to shield those dominant streaming platforms like Netflix and technology companies from much needed competition," a Paramount spokesperson said. The company argued the merger would create a stronger rival to Netflix, Amazon and Apple, and pledged to release at least 30 films a year for full theatrical runs with a minimum 45-day window. The fate of theatrical releases for Hollywood movies has been a major source of contention for the industry. Paramount noted that competition regulators in 24 jurisdictions have already cleared the transaction or allowed their review periods to expire. Ross Benes, a senior analyst at research firm Emarketer, said the lawsuit represented "an easy political win" for the attorneys general but was unlikely to succeed. With federal agencies sidelined, the state attorneys general lack the jurisdictional muscle to block the deal, he added. According to the complaint, the combined company would control roughly 27 percent of wide-release theatrical film distribution and a similar percentage of basic cable channel licensing. The coalition has asked the companies not to close the transaction until the legal challenge is resolved, and warned it would seek a temporary restraining order if they refuse. Paramount last month secured the green light of federal antitrust authorities, handing a major win to a media empire financed by one of Trump's closest billionaire allies. - Trump ties - The approval was a coup for Paramount chief executive David Ellison, whose father, Oracle co-founder Larry Ellison, largely financed the takeover. The elder Ellison, one of the world's richest men, is a close ally of Trump and a major donor to his political campaigns. Hundreds of actors and directors have signed a letter opposing the merger, warning it would choke production in an industry already battered by years of consolidation and cost-cutting. The takeover battle began last year, when streaming giant Netflix and Paramount went to war over Warner Bros. and its prized back catalog. A wary Tinseltown reluctantly lined up behind Netflix as the lesser of two evils, only to watch Paramount keep raising its bid until the streamer walked away.

A group of 12 states sued Paramount Skydance Corp. Monday seeking to block its $110 billion bid to buy Warner Bros. Discovery Inc., alleging the blockbuster Hollywood deal would leave viewers with higher prices and fewer choices for movies and television.  Jennifer Rie, Bloomberg Intelligence Senior Litigation Analyst for Antitrust joins Bloomberg Businessweek Daily to discuss. (Source: Bloomberg)

Paramount Skydance CEO David Ellison may think the promise of the Paramount Warner Bros. Discovery mega-merger is an offer we can’t refuse, but I’m here to say: He’s wrong. I am leading a coalition of 12 state Attorneys General in taking Paramount and Warner Bros. to court to stop this unlawful merger. The entertainment industry […]

Twelve Democratic-led states on Monday sued to stop Paramount Skydance’s $110 billion purchase of Warner Bros. Discovery, arguing that a merger of two of the country’s largest media companies would hurt American consumers. The attorneys general of Arizona, California, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington joined together to file the lawsuit in the U.S. District Court for the Northern District of California. The lawsuit argues that the merger will hurt the market for film distribution and give the new company too much power over the market for distributing basic cable channels.“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.,” California Attorney General Rob Bonta said in a statement.If Paramount’s acquisition of Warner Bros. is successful, the company would own two major news networks in CNN and CBS News, the movie studio Warner Bros., and the streaming service HBO Max. Larry Ellison and his son David Ellison, staunch supporters of President Trump, own Paramount Skydance, and would effectively have their own conservative media empire.The merger has also raised concerns that CNN would be overhauled to reflect the conservative political views of the Ellisons. The two Trump allies have already steered Paramount’s CBS News to the right, causing its ratings to plummet and, in the process, an employee exodus from its flagship 60 Minutes program.Trump is very much in favor of the merger, holding a longtime vendetta against CNN over its critical coverage of him, and has discussed who he wants to be fired at the network once the takeover is complete. Other officials in the Trump administration, such as Secretary of Defense Pete Hegseth, have openly cheered on pro-Trump changes at CNN.The Department of Justice said last month that it would not challenge Paramount’s move, saying it was “not likely to harm competition or American consumers.” Now that decision will go to federal court, where a judge will determine if the damage to the public breaks the law.

Paramount Skydance sharply criticized a coalition of 12 Democratic state attorneys general that sued to block the David Ellison-led company’s takeover of Warner Bros. Discovery. The lawsuit filed by the state AGs “distorts settled antitrust law and is based on a misrepresentation of competition in the entertainment industry today,” Paramount said Monday, after the suit […]

Paramount has vowed to fight California's lawsuit seeking to block its proposed $110-billion merger with Warner Bros. Discovery, arguing the deal would actually boost competition.