Paramount Skydance’s plan to buy Warner Bros. Discovery is running into resistance.
State attorneys general from California, New York, New Jersey, and nine others have sued David Ellison’s media company, alleging its WBD deal is anticompetitive and harmful for consumers.
“The unlawful merger of these two entertainment behemoths 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,” California attorney general Rob Bonta said in a statement.
This lawsuit was widely expected. Bonta said before the deal was official that his office would give any proposal to buy WBD “a very close look.”
Paramount has been hoping to fast-track its WBD acquisition, as the company has agreed to pay WBD shareholders about $7 million each day that the deal doesn’t close, starting after September 30.
Buying WBD would make Paramount a Hollywood superpower by giving it control of the Warner Bros. Studio, HBO, HBO Max, and TV networks like CNN. Ellison already has Paramount Pictures, the Paramount+ and Pluto TV streamers, the CBS broadcast network, and cable channels like MTV.
Donald Trump’s Department of Justice approved Paramount’s WBD deal in mid-June, stating that the transaction was “not likely to result in harm to competition or American consumers” in streaming, pay TV, or movie production and distribution.
European regulators are reviewing Paramount’s plan to acquire WBD and have already secured concessions, including Paramount exiting the United International Pictures joint venture with Comcast’s Universal Pictures. The European Commission now has until July 22 to review the updated proposal.
Top Hollywood stars like Ben Stiller and Mark Ruffalo have spoken out against the deal, saying in a joint statement that it would “further consolidate an already concentrated media landscape” and result in “fewer opportunities for creators, fewer jobs across the production ecosystem, higher costs, and less choice for audiences in the United States and around the world.”
Some WBD shareholders are getting antsy. WBD’s stock, which trades based on the perceived likelihood of Paramount paying the deal price of $31 per share, is down about 8% since late February.
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