California and 11 other states sued to stop Paramount’s $110 billion acquisition of Warner Bros. Discovery, claiming the deal would create a media giant with the ability to raise prices in film and television.
The planned merger would unite the two historic film studios along with streaming platforms Paramount+ and HBO Max.
The lawsuit, led by California Attorney General Rob Bonta, was filed in the U.S. District Court for the Northern District of California and is also brought forth by attorneys general of Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington.
“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.,” Bonta said in a statement.
A Paramount spokesperson called the lawsuit a “misrepresentation of competition in the entertainment industry today,” adding that it plans to “vigorously defend the transaction and demonstrate that this challenge is inconsistent with sound competition policy and the competitive realities of the media marketplace.”
“The combination of Paramount and WBD will create a stronger, well-capitalized, creative-first media company that is better positioned to compete with companies like Netflix that have come to dominate the industry for audiences, premium content, and creative talent. Put simply, any attempt to block this transaction undermines the very principles antitrust law is designed to promote: more competition, more choice for consumers, and more opportunities for creators and workers,” the Spokesperson said.
“Delaying this transaction will only harm entertainment workers who have already suffered over recent years as technology has disrupted their livelihood and cost California tens of thousands of entertainment jobs.”
Paramount shares increased by 1.5%, and Warner Bros shares went up by 1.9% following the announcements.
By CEO NA Editorial Staff
