California Leads Antitrust Suit Against Paramount-Warner Merger

California is leading an effort to prepare a possible lawsuit that could thwart Paramount Skydance Corp.’s planned acquisition of Warner Bros. Discovery on antitrust grounds. The litigation would seek to challenge the proposed $110 billion merger, arguing it would stifle competition, lower wages and lead to widespread job losses.

According to sources familiar with the deliberations who were not authorized to comment publicly, as reported by Los Angeles Times, the lawsuit could be filed as early as this month. The effort involves multiple states, including New York and Colorado, according to Bloomberg and Reuters. California Attorney General Rob Bonta’s office stated that “The Paramount acquisition of Warner Brothers remains an active investigation, and we do not have any updates to share at this time.”

The proposed transaction has faced pushback from actors, writers and others in Hollywood over its potential to eliminate jobs. The merger has been controversial because Paramount Chairman David Ellison has said that after the company receives regulatory approval, he plans to make $6 billion in cuts between both companies.

Paramount hired antitrust attorney Jeffrey Kessler to defend its planned acquisition of Warner Bros. Discovery. Kessler recently led a case for state attorneys general against concert promoter and ticketing firm Live Nation, resulting in a win for states, including California. Despite the potential obstacle, Raymond James equity analysts said in a note on Thursday that they “still believe the deal is likely to close.”

About 100 people gathered at Lumiere Music Hall in Los Angeles for an event organized by advocacy groups and industry workers who wanted to voice their concerns about the merger. Stand-up comedian Adam Conover, whose show was canceled after AT&T's acquisition of Time Warner, framed the ongoing media consolidation as an existential threat to the entertainment industry.

California has been particularly hard hit, shedding 17,234 positions from 2019 through 2023. The occupancy rate in Hollywood’s sound stages has fallen to 62% in the first half of 2025, down from nearly full occupancy in 2016. The International Alliance of Theatrical Stage Employees reported that its members worked about 36% fewer hours than in 2022.

The UK competition watchdog has opened an investigation into Paramount Skydance’s $110bn (£82bn) takeover of Warner Bros Discovery, as reported by The Guardian. The deal will create a media powerhouse controlling assets including the Paramount and HBO Max streaming services, Channel 5 and TNT Sports. The Competition and Markets Authority said it has opened an investigation to ascertain whether the tie-up will result in a “substantial lessening of competition” in the UK.

The CMA said it will decide by August 7 whether the deal warrants a more in-depth phase 2 investigation, which can take up to five months. In February, Paramount beat Netflix to take over WBD, bringing an end to a high-stakes bidding war between the media companies. Netflix refused to increase its bid, saying that at the price offered for WBD it was “no longer financially attractive” to continue the bidding war.

Paramount, which paid a $2.8bn fee to Netflix for breaking the streamer’s $82.7bn deal for WBD’s streaming and studio assets, is facing regulatory scrutiny and a backlash from critics worried about the impact on Hollywood. In April, more than 1,000 film and TV industry professionals, including Mark Ruffalo, Kristen Stewart, Ben Stiller and Joaquin Phoenix, signed an open letter protesting against the deal.

The US senator Elizabeth Warren has described the deal as “an antitrust disaster threatening higher prices and fewer choices for American families”. In April, David Ellison, chief executive of Paramount, told a movie theatre owners convention that he promised to continue to make a minimum of 30 films a year across the Paramount and Warner Bros film studios. The move by Ellison, whose deal for WBD is backed by a $40bn personal guarantee by his father, the Oracle co-founder Larry, is an attempt to allay industry fears that he would cut output in the same way Disney did, despite promising not to after taking over Rupert Murdoch’s 21st Century Fox in 2019.