The $110 billion Paramount & Warner Bros Discovery merger faces a major obstacle, with 12 states filing suit. The latest development comes despite the merger receiving clearance from the Justice Department last month.
What is the update on the Paramount & Warner Bros. merger?
A group of 12 states, including California, has filed a lawsuit against the Paramount & Warner Bros. deal, reports Deadline. The lawsuit was filed in federal court in Sacramento on Monday.
The lawsuit argues that the merger would stifle competition in wide-release theatrical film distribution, big-budget motion picture distribution, and the licensing of basic cable television channels.
Joining California in the lawsuit are Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington. The states argue that the Paramount–Warner Bros. Discovery merger would result in mass layoffs.
The suit also focuses on the impact the deal would have on the creative community and the information environment. If the deal eventually happens, Paramount would own two legacy news brands, namely CBS News and CNN.
California Attorney General Rob Bonta, who led the lawsuit, criticized the much-talked-about merger in a statement. “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 U.S.”
“This merger, in short, would create a media behemoth,” added the lawsuit. The 12 states’ Attorney Generals claim that the deal will lead to price hikes and poor quality due to Paramount and Warner Bros. being able to have a larger share of box office revenue from exhibitors.
In case of a successful merger, the combined company would control more than 30% of wide-release big-budget theatrical films, according to the lawsuit.
