California's attorney general has accused Paramount and Warner Bros of trying to “blackmail” regulators into allowing their $110bn merger, as a dozen states filed suit to block what would be the largest media consolidation in Hollywood history.
Rob Bonta told the BBC he viewed a reported plan to move Paramount out of California as “an explicit statement” and “a last-ditch effort to blackmail the regulators into allowing an illegal deal to go through”. He added: “It didn't work. It won't work. It doesn't work.”
“Twelve US states, led by California, sue to block the $110bn Warner Bros-Paramount merger, alleging it would stifle competition.”
The lawsuit, led by California and joined by 11 other states, argues the merger would kill competition in film and television, ultimately harming consumers. If approved, the combined company would control over a quarter of major film releases. Together with Disney, Universal and Sony, just four conglomerates would dominate 86% of that market.
“It 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 US,” Bonta said.
The deal would end a century of fierce rivalry between two of Hollywood's biggest hitmakers. Their combined empire spans franchises like Harry Potter, Batman, Mission: Impossible and Top Gun, along with TV channels CNN, MTV and Nickelodeon.
The legal challenge centres on three areas: major cinema releases, blockbuster films and basic cable TV. States argue that without competition, theatres and distributors lose bargaining power – currently, if one studio demands unfair prices, a distributor can turn to the rival. That option would vanish.
The move comes after the US Department of Justice approved the merger in June. The states have requested a halt pending judicial review, threatening a temporary restraining order if the companies do not comply.
Paramount declined to comment on whether it is considering leaving California or on Bonta's interview. The company has been based in the state for more than 100 years. US news website Semafor reported that David Ellison, controlling owner and chief executive of Paramount Skydance and son of tech billionaire Larry Ellison, has been urged by advisers to move operations out of California.
Bonta said he was aware of the report and described it as a threat. The regulatory challenge now poses a significant hurdle for the entertainment giants as they attempt to merge.