Paramount fires back at state AGs over Warner Bros. merger block bid
Paramount urged a federal judge to reject a temporary restraining order targeting its planned $110 billion merger with Warner Bros. Discovery.
By Poppy Nakagawa · Culture Writer
3 min read
Paramount is swinging hard at a last-minute legal bid to freeze its planned $110 billion merger with Warner Bros. Discovery, telling a federal court that state attorneys general have brought what it called “one of the weakest merger challenges in modern antitrust history.”
The company made the argument in an opposition filing ahead of a Friday hearing on a request for a temporary restraining order. The case was filed in federal court in the Northern District of California by a group of 12 attorneys general led by California Attorney General Rob Bonta.
The attorneys general are asking the court to stop Paramount Skydance Corporation and Warner Bros. Discovery, Inc. from closing the deal while their antitrust challenge proceeds. Paramount told the court the states have not shown they are likely to win.
According to Paramount’s filing, the proposed merger would help competition rather than hurt it. The company said the combination would support more premium programming, spur investment in film production jobs, shore up basic cable television as cord-cutting pressures the business, and increase theatrical releases.
Paramount also argued that the merged company would be better positioned against major streaming rivals, naming Netflix, Amazon and Disney in its filing.
The states say competition is at risk
The attorneys general’s lawsuit claims the merger would reduce competition and harm consumers and the entertainment business. Their challenge centers on three areas: wide theatrical releases, blockbuster films and cable networks.
Paramount rejected that framing in its court papers, calling the states’ proposed markets artificially narrow. The company argued that the data cited by the attorneys general does not properly account for how rivals could expand, especially in theatrical distribution.
In its filing, Paramount pointed to Universal, Disney, Amazon MGM, Sony, Lionsgate, A24 and Neon as existing competitors that could grow their output. The company said those rivals, along with low barriers to expansion, would keep competition strong and limit any effect on negotiations with theater owners.
On cable, Paramount said its channel lineup and Warner Bros. Discovery’s lineup complement each other rather than replace each other. The company also emphasized streaming, even though streaming is not one of the markets at the center of the state lawsuit, arguing that the deal would make the combined company a stronger challenger to larger platforms.
A crowded court fight
The merger has approval from the Justice Department and most other regulators, though not all, according to the report. The Ellison-led company had planned to close the transaction in the third quarter. A temporary restraining order or preliminary injunction could delay that timing.
The state attorneys general filed their antitrust suit Monday. The hearing on the temporary restraining order is scheduled for Friday.
The merger is also facing other legal pressure. A Paramount shareholder filed a derivative suit Wednesday against the Ellisons and the company’s board of directors on behalf of Paramount. The Writers Guild of America filed its own suit the day before seeking to block the deal.
A separate case brought earlier this year by a group of Paramount+ subscribers was set for its first hearing before Judge Araceli Martinez-Olguín, who was assigned to the state attorneys general’s case after replacing another judge.
Paramount asked the court to deny the states’ request for emergency relief, saying the challenge does not justify stopping the merger from closing.
This story draws on original reporting from Deadline.