Paramount Sued Over Warner Bros. Merger

A group of 12 states led by California is suing to block the planned $111 billion merger of entertainment giants Paramount Skydance and Warner Bros. Discovery.

The long-expected suit was filed today in California federal court. In a statement on the move, California Attorney General Rob Bonta said:

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’s film and entertainment industry touches the lives of Americans daily — it comes into the living rooms of families, has a starring role in many young people’s first dates, and is a point of immense pride and employment for Californians up and down our state.

The suit marks the latest twist in an already lengthy saga over control of Warner Bros. Discovery. After making it clear it was up for sale in 2025, WBD first signed an $82.7 billion deal with Netflix for the company, which currently includes networks like HBO and CNN, the Warner Bros. Pictures library, DC Comics, and many more properties.

But Paramount, controlled by the wealthy Ellison family, also coveted WBD, and refused to quit its pursuit. After upping its offer, WBD reversed course, backed out of its deal with Netflix, and agreed to terms with Paramount. (Their “superior” offer of $31 per WBD share in cash also included a $2.8 billion payment to Netflix for terminating the companies’ earlier agreement.)

The U.S. Department of Justice said last month that it would allow the transaction to proceed, claiming the deal was “not likely to harm competition or American consumers.” The states involved in this California lawsuit see otherwise, arguing that a Paramount/WBD mega-conglomerate would hurt the market for movies and movie theaters, as well as reducing the competition in the world of cable television — which would now be controlled in far larger way by this combined media giant.

Before this suit, the Paramount/WBD merger was expected to close by the end of 2026. This legal action makes that far less likely. As noted by The New York Times, “that could be costly for Paramount, which has agreed to pay Warner Bros. shareholders $650 million for each quarter the deal doesn’t close, starting in October.”