Imagine if the companies behind Harry Potter, Batman, Mission: Impossible, Top Gun, CNN, MTV and Nickelodeon were all owned by the same parent. That is the scale of the proposed $110bn (£85bn) merger between Paramount and Warner Bros. Discovery – and a coalition of 12 US states, led by California, has filed a lawsuit to block it, arguing it would be the largest media consolidation in Hollywood history and would harm competition and raise prices for consumers.
The deal would combine two of Hollywood's oldest and fiercest rivals, ending a century of competition between them. Paramount, which has been based in California for more than 100 years, owns the Paramount film studio, CBS News, MTV and Nickelodeon. Warner Bros. Discovery owns the Warner Bros. film studio, CNN, HBO, and DC Comics. Together they would control more than a quarter of major film releases. Along with Disney, Universal and Sony, just four conglomerates would then control 86% of that market.
“Why 12 US states are suing to block the $110bn Paramount-Warner Bros merger.”
The lawsuit, filed in the US district court for the northern district of California, is led by California Attorney General Rob Bonta. He has called the merger "unlawful" and claimed 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". The states argue the merger strips movie theatres and television networks of bargaining power – if one studio demands unfair prices, distributors cannot easily walk away and deal with a rival.
The states involved are Arizona, California, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington. The US Department of Justice approved the merger in June, but the states are asking a judge to halt the transaction pending judicial review, and have threatened a temporary restraining order if the companies do not comply.
Why it matters for UK readers
British audiences are among the biggest consumers of Hollywood content, and the UK is a major production hub for both studios. The Harry Potter films were made in the UK, and Warner Bros has a large studio complex in Leavesden, near London. If the merger leads to higher prices or less content, UK viewers could feel the effects through higher subscription fees for streaming services or cinema tickets. The deal also faces regulatory scrutiny in the UK: on 30 June, UK Culture Secretary Lisa Nandy said she was "minded" to intervene and asked Ofcom and the Competition and Markets Authority (CMA) to investigate further, which would delay the timeline.
Key questions answered
Q: Why are states trying to block the Paramount-Warner Bros merger? The 12 states argue the merger would create a media behemoth that dominates film releases and cable TV, reducing competition and leading to higher prices and lower quality for consumers. They say it violates antitrust laws.
Q: Has the merger already been approved? The US Department of Justice approved the merger in June, and dozens of other countries have agreed too. However, the states' lawsuit could still halt or delay it. Approval from UK and European regulators is still pending.
Q: What happens if the merger goes ahead? If approved, the combined company would control nearly a third of the US theatrical motion picture market and a large share of basic cable programming. The lawsuit also notes concerns about widespread layoffs and the impact on the creative community.
What happens next
The court will hear the states' request for a temporary restraining order or preliminary injunction. Paramount has said it will "vigorously defend the transaction" and called the lawsuit a "fundamentally flawed application of the antitrust laws". In the UK, the CMA and Ofcom are expected to report back to the culture secretary, who will decide whether to intervene. The merger's fate could take months to resolve.