Friday, 17 July 2026, 6:51
A coalition of 12 states, led by California Attorney General Rob Bonta, filed a lawsuit Monday to block Paramount Skydance's proposed $111 billion takeover of Warner Bros. Discovery. The states argue the merger would violate antitrust laws, reduce competition, and harm consumers nationwide.
The lawsuit, filed in federal court in San Francisco, claims the merger would violate the Clayton Act, a century-old antitrust law. Bonta stated the deal would “extinguish competition,” leading to higher prices, lower content quality, and fewer movies and TV shows. The states are asking Paramount and Warner Bros. to delay closing until the judicial process concludes, threatening a temporary restraining order if they refuse. On Monday night the states asked the court for a temporary restraining order and a preliminary injunction. The motion was made to “make sure that the proposed merger is halted during the pendency of the litigation,” Bonta told CNN’s Kaitlan Collins. If a judge agrees and imposes a restraining order, Paramount would be blocked from completing the deal for the time being, though the company would almost certainly appeal.
Paramount responded, calling the lawsuit a “fundamentally flawed application of the antitrust laws” and vowing to “vigorously defend” the transaction. The company argues the merger would create a stronger competitor against dominant streaming platforms like Netflix. Paramount also pointed out that regulators in markets around the world have already approved the merger, including the US Department of Justice. The DOJ’s review was clouded by allegations of political favoritism, given Paramount’s close ties to President Trump and members of his administration. “This reeks of corruption,” Sen. Elizabeth Warren said when the DOJ approved the deal in June.
The complaint identifies three markets: distribution of wide-release theatrical films, distribution of anticipated top-grossing films and licensing of basic-cable channels. The states calculated that the combined company would hold around 27 percent of the wide-release film market, more than 30 percent of the anticipated top-grossing film market and 27 percent of basic-cable licensing revenue. In the wide-release market, the complaint calculated that the merger would raise the Herfindahl-Hirschman Index, a measure of concentration, by 359 points to 2,074. The states said that the level was presumed to substantially lessen competition under federal merger guidelines.
Paramount and Warner Bros. Discovery currently negotiate separately with theaters over ticket-revenue shares, release dates and screen allocation, according to the complaint. It is alleged that removing one studio could strengthen the combined company's bargaining power and reduce film output and variety. The two companies disclosed that their combined cable holdings include CNN, TNT, TBS, Nickelodeon, MTV, Comedy Central, HGTV and Food Network. The complaint alleged that distributors resisting fee demands could risk losing several channels at once.
Paramount said greater scale was needed to compete with global streaming and technology companies. It said the merger would expand its content library, strengthen streaming operations and generate up to 6 billion dollars in annual cost savings. The company also committed to releasing at least 30 theatrical films annually through the two studios, with a minimum 45-day theatrical window. The states said such commitments would not replace competition between independently controlled companies or constitute enforceable antitrust remedies.
The lawsuit is brought under Section 7 of the Clayton Antitrust Act, which prohibits acquisitions that may substantially lessen competition. The states are acting "parens patriae," allowing them to sue on behalf of their residents' collective economic interests. The complaint cites Supreme Court precedent that mergers significantly increasing concentration in a concentrated market are presumptively anticompetitive. Because Section 7 requires only a showing that competition "may" be harmed, the states' theory is forward-looking, attacking the merger's anticipated future impacts rather than identifying current wrongdoing.
In conversations with CNN ahead of the filing, state-level officials said they believe the Trump administration has largely abandoned its antitrust enforcement responsibilities. So, as one of the officials said, “Someone’s gotta do it.” A similar coalition of states sued in March to block Nexstar’s pending acquisition of Tegna, a deal that would merge two rival owners of local TV stations. The states succeeded in convincing a judge to freeze the merger in advance of a trial. Analysts speculated that state prosecutors may have a harder time proving antitrust harm resulting from the Paramount–WBD deal, but Bonta exuded confidence at a press conference on Monday. Standing in front of the Hollywood sign, Bonta said “antitrust enforcement is democracy’s check on oligarchy.”
Rep. Darrell Issa (R-Escondido) sent a letter to Bonta and Gov. Gavin Newsom urging them to reconsider, questioning whether the state is “weaponizing antitrust law” at the risk of driving production, capital, and jobs out of California. The lawsuit has drawn political lines, with Democrats supporting the action and Republicans criticizing it. Bonta dismissed threats of Paramount leaving California as “blackmail.”
According to reports from Semafor, Paramount CEO David Ellison is considering moving the studio’s headquarters out of California as tensions bubble over. Washington State Attorney General Nick Brown said in a statement, "If allowed to go through, this merger would raise prices, reduce consumer choice, and cost many Americans their jobs while enriching billionaires and C-suite executives."
Bonta also referenced Paramount CEO David Ellison by name. The executive’s father, Larry Ellison, is the billionaire Oracle co-founder whose fortune is backstopping the Paramount bid for Warner Bros. The Ellisons have been working behind the scenes for months to secure approvals for the deal.
The proposed merger combines two of Hollywood's last five legacy studios, uniting Paramount's CBS and Paramount+ with Warner's HBO Max, CNN, and iconic franchises like Harry Potter and Batman. The deal received shareholder approval in April and Justice Department clearance in June, but has faced opposition from industry professionals and international regulators. Thousands of actors, directors, and writers signed an open letter against the merger, warning of job losses and reduced content variety.
The US Department of Justice said in June that it had closed an eight-month investigation without challenging the deal. The department said it reviewed more than 2 million documents and concluded that the merger was unlikely to harm competition in streaming, traditional television or theatrical film production and distribution. Regulatory records showed that reviews remained open in the European Union and Britain, while Australia's competition authority had cleared the transaction.
The DOJ’s approval has itself become contested. The Wall Street Journal reported that senior officials fast-tracked clearance before career attorneys weighing a challenge could intervene, a characterisation the outgoing antitrust chief has denied. Paramount’s chief legal officer is Makan Delrahim, who ran the DOJ’s antitrust division in Trump’s first term. He led the failed attempt to block AT&T’s takeover of Time Warner, the same assets now in play. Trump has been publicly supportive of the Ellisons and has openly discussed CNN’s future. The president’s willingness to comment on a pending media transaction is a break with the convention that antitrust regulators operate at arm’s length. The FCC has still not signed off, because Paramount holds licences for 28 local stations. Chairman Brendan Carr, a Trump appointee, has already called it a good deal that should get through quickly.
Delay is expensive, which is the point of suing. From October, Paramount owes Warner shareholders roughly $650m for every 90 days the deal slips. Miss June next year and the bill is $7bn. The financing already involves $80bn of new debt and non-voting stakes from Saudi, Qatari, and Emirati sovereign funds, which makes the combined company a near-certain candidate for deep cuts. Integration is not waiting for the courts either. Paramount has been consolidating its streaming tech stack in preparation for HBO Max, an asset it is also pushing into markets like India.
Strip away the studio lots and this is about the Ellisons. Paramount is chaired by David Ellison, but the bid was financed and guaranteed by his father Larry, the Oracle co-founder. Larry Ellison is a Trump supporter and adviser who has sat on a White House board advising on artificial intelligence. Last year the administration granted him and Oracle a controlling stake in TikTok’s US operations. Consider what that assembles. Oracle supplies infrastructure that a large share of American commerce and government runs on, and the same family would now control TikTok’s US arm, CBS News, CNN, two major streamers, and a wall of cable channels. That concentration of distribution on top of infrastructure is the part that should interest anyone who covers technology. It is not a claim of wrongdoing, and Bonta’s complaint does not rest on it, but it is the reason this deal is bigger than Hollywood.
The looming merger is also weighing on CNN, which Warner Bros Discovery owns, amid concerns that the merger could lead to editorial shifts comparable to Ellison’s takeover of CBS News, where he has subsequently installed Bari Weiss, a right-leaning opinion journalist with no previous TV experience, to lead the network, raising concerns that the network is trying to appease the Trump administration. Among the concerns raised are instances of the spiking of stories critical of the Trump administration and hiring a prior Trump appointee as an ombudsman to oversee allegations of bias. The changes have subsequently led to top network talent leaving CBS News, including broadcast journalist Scott Pelley, who accused Weiss of “murdering” 60 Minutes, the network’s long-standing news magazine programme. In June, ratings for CBS Mornings fell to a record low for the month. Staff are concerned that Weiss may move over to reshape CNN. Broadcast journalist Anderson Cooper reportedly said he would exit CNN if Weiss were to join the network, and this comes as legal affairs correspondent Paula Reid is moving to MS Now.
Bonta referenced those concerns at his press conference, alleging that “this merger will mean fewer journalists informing the electorate. It will mean fewer opportunities for Americans to hear the full breadth of information and opinions on a subject, and then come to their own conclusions.” However, the states’ antitrust lawsuit is primarily about the merger’s potential impacts on the entertainment industry, not news.
The Writers Guild of America on Tuesday issued a separate lawsuit to block the proposed merger of Paramount and Warner Bros. The labor union, which represents thousands of TV, news, movie and online writers, alleges that the deal violates federal antitrust law and would lead to lower pay and fewer opportunities for writers. "If Paramount succeeds in buying Warner Bros., the merged firm will be the largest buyer of original film and television programming in the United States," Writers Guild of America West President Michele Mulroney said in a statement. "This would eliminate competition in an already consolidated industry, threatening the livelihoods of entertainment workers and the creative diversity of TV and film."
Paramount argued that the deal would promote competition and result in a stronger company. The company said in a separate statement Tuesday that the merger "will have the scale and resources to reverse the current trends in our industry and expand opportunities for writers, not shrink them." "Combined with our commitment to preserve our iconic brands under independent creative leadership, this will mean more jobs, more writers' rooms, more staffed positions, and more sustained work across film and television — not less," Paramount's statement said. The entertainment company, led by CEO David Ellison, had committed to releasing 30 films a year in theaters through the combined business, a move it said will help support job growth. The company said it's also pledging to maintain two distinct film studios to show its "commitment to preserving and boosting creative competition."
The lawsuit adds a significant hurdle to the merger, which Paramount hoped to close by September. If delayed beyond September 30, Paramount faces a ticking fee of $650 million per quarter. The outcome will shape Hollywood's competitive landscape, with implications for consumers, workers, and the California economy.
