A coalition of 12 U.S. states has filed a lawsuit seeking to block Paramount’s proposed takeover of Warner Bros. Discovery, arguing the multibillion-dollar merger would significantly reduce competition in Hollywood and leave consumers with fewer entertainment choices.
California Attorney General Rob Bonta, who is leading the legal challenge, said the merger would bring together two of Hollywood’s five remaining legacy studios and could result in higher prices, fewer movies and television shows, and a decline in overall content quality.
The lawsuit argues the proposed combination would “extinguish competition” and cause substantial harm to consumers, movie theatres and basic cable distributors.
The coalition includes California, Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington.
A combined Paramount-Warner business would bring Warner Bros. Discovery assets, including HBO Max, CNN and major film and television libraries, under the same corporate umbrella as Paramount’s CBS and Paramount+ operations.
The states are asking Paramount and Warner Bros. Discovery to delay closing the transaction until the legal process is completed. If the companies refuse, the coalition could seek a temporary restraining order to halt the merger.
Paramount rejected the states’ arguments, saying the lawsuit misrepresents established antitrust law. The company maintains the merger would create a stronger competitor to dominant streaming and technology platforms and support theatrical exhibition and entertainment industry jobs.
Paramount has vowed to vigorously defend the proposed transaction. Warner Bros. Discovery deferred to Paramount for comment.
The legal challenge comes at a critical stage for the deal. The proposed takeover received shareholder approval in April and secured backing from the Trump administration last month following a highly public bidding battle involving Netflix.
Paramount and Warner had hoped to complete the transaction during the third quarter of 2026, with the companies recently signalling plans to close the deal within weeks. The states’ lawsuit could now delay that timeline.
Paramount has agreed to compensate shareholders if the transaction is not completed by Sept. 30, offering a 25-cent-per-share fee for every quarter the deal remains unfinished beyond that date. The agreement also includes a $7-billion regulatory termination fee.
Including debt, Paramount’s proposed acquisition of Warner Bros. Discovery is valued at nearly US$111 billion, based on a price of $31 per share.
Paramount says the transaction has already received regulatory clearances in several countries, including Canada, China and Australia. Reviews remain underway in the European Union and the United Kingdom.
Critics argue the merger would further consolidate an entertainment industry already dominated by a small number of major corporations. According to the states’ lawsuit, a combined Paramount-Warner could control nearly one-third of the U.S. theatrical film distribution market and basic cable programming sector.
New York Attorney General Letitia James warned the deal could create a media company with significant global influence over both news and entertainment while potentially putting jobs and businesses at risk.
Paramount and Warner Bros. Discovery have argued that combining their operations would strengthen industry growth and give consumers greater access to entertainment content, including through the potential integration of HBO Max and Paramount+ libraries.
