California is moving to dim the lights on a massive Hollywood merger. A coalition of 12 states led by California Attorney General Rob Bonta filed an antitrust lawsuit Monday to stop Paramount's proposed $81 billion purchase of Warner Bros. Discovery, arguing that the "unlawful" merger would hand the combined company control over nearly a third of theatrical releases and basic cable programming, the Wall Street Journal reports.
- "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 US," Bonta said in a statement.
The coalition also includes Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington, per Axios. They are asking the court to bar the companies from closing the deal while the case proceeds. Bonta said the coalition is "fighting for free and fair markets, not rigged markets," adding, "America has no kings in government or our economy." The challenge—filed in federal court in Northern California—poses the most serious threat yet to a merger the Justice Department has already cleared, the Journal reports. Several foreign regulators have also approved the deal, though the UK's antitrust regulator has said it might intervene.
A delay could be costly: Paramount has agreed to pay Warner shareholders about $650 million per quarter if the deal isn't done by Sept. 30. Hollywood unions, theater owners, and more than a thousand actors and producers have already warned the tie-up would cut jobs and further shrink an already concentrated media landscape. Paramount argues the merger is needed to compete with giants like Netflix and Amazon.
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