Attorneys general from up to 10 states are preparing to file an antitrust lawsuit as early as the end of June to block the proposed $111 billion merger of Paramount Skydance and Warner Bros. Discovery, according to reports from the Los Angeles Times, Bloomberg and The Wrap.
The multistate action is being led by California Attorney General Rob Bonta, who characterized the potential competitive effects of the deal in broad terms earlier this year. “Red flags are everywhere when you have a merger of this type,” Bonta told The Wrap in early April.
The litigation is still taking shape and has not been formally announced. Bonta’s office declined to confirm to the news organizations that a lawsuit is imminent, stating: “The Paramount acquisition of Warner Brothers remains an active investigation, and we do have any updates to share at this time.”
According to sources who spoke to the LA Times, Bloomberg and The Wrap, the states that have been involved in Bonta’s investigation and may join the lawsuit, aside from California, are Colorado, Connecticut, Massachusetts, Nevada, New York, Oregon, Pennsylvania and Tennessee.
The merger, which would create an entertainment monolith across television, film and streaming, has drawn sharp rebukes from across Hollywood and from some parts of the federal government. Paramount Chairman David Ellison has said that after the company receives regulatory approval, he plans to make $6 billion in cuts between both companies — a figure that industry professionals widely expect to translate into substantial job layoffs.
Warner Bros. shareholders voted to approve selling the company to Paramount for $31 per share. Earlier this year, Paramount and Netflix competed for months for the right to buy Warner Bros. Discovery, with Netflix ultimately walking away.
Ellison has said the Paramount and Warner Bros. film studios will maintain their current pace of 15 theatrical releases per year. The deal still requires clearance from federal antitrust regulators in addition to the multistate action, and comes as the Biden administration and the Federal Trade Commission have taken an aggressive posture toward media consolidation. MSI previously reported that a federal judge blocked the Nexstar-Tegna TV merger on antitrust grounds in April.