A coalition of 12 US state attorneys general has filed a lawsuit to prevent Paramount and Skydance Media's proposed $111 billion acquisition of Warner Bros. Discovery. The states contend that the merger would violate the Clayton Act, an antitrust law designed to prevent monopolies.
California Attorney General Rob Bonta stated that the merger would "snuff out competition, drive up prices, diminish content quality, and produce fewer movies and shows each year." The lawsuit includes attorneys general from Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington. They argue that Paramount would gain control of over 30% of movies released in theaters, potentially forcing cinemas to implement changes detrimental to their businesses, such as limiting discounts, reducing facility investments, and increasing ticket prices due to higher film licensing fees.
The filing also notes that movie theaters rely on competition between Paramount and Warner Bros. "Through this competition, theatres incentivize creativity and quality, and they secure competitive prices and terms for themselves and for audiences," the complaint reads. "There is no debate here: This merger will snuff out competition, drive up prices, diminish content quality, and produce fewer movies and shows each year."
Paramount Skydance has responded by calling the lawsuit a "fundamentally flawed application" of antitrust laws. The company maintains that the merger would strengthen its ability to compete with major entertainment players like Netflix. Paramount had initially pursued acquiring Warner Bros. Discovery, but reportedly withdrew after an increased offer from Skydance persuaded shareholders.
Beyond its film and television assets, the acquisition would also place Warner Bros. Games under Paramount Skydance's ownership. This includes valuable intellectual property and development studios such as NetherRealm Studios, the developer behind Mortal Kombat, and Portkey Games, which oversees Hogwarts Legacy. Paramount CEO David Ellison is known to be a gamer, and the company is already involved in gaming-related projects, including an upcoming Call of Duty movie and the newly formed Paramount Games Studio, which is developing titles like Marvel 1943: Rise of Hydra and a Star Trek horror game.