California Attorney General Rob Bonta on Monday said the proposed $110 billion merger between Paramount and Warner Bros. Discovery would “extinguish competition” across the entertainment industry, arguing the deal would ultimately result in higher prices, fewer movies and TV shows and lower-quality content for consumers.
“Today, I am leading 12 states in challenging the proposed merger of Warner Bros. and Paramount and asking the court to block the merger,” Bonta said at a press conference announcing the lawsuit. “This $110 billion proposed merger, the largest merger in Hollywood history, would extinguish competition. It would result in higher prices, lower content quality and fewer movies and TV shows.”
The lawsuit, filed in the U.S. District Court for the Northern District of California, alleges the merger would violate the Clayton Act by reducing competition in theatrical film distribution and the licensing of cable networks.
Bonta argued that the combined company would control “nearly one-third” of theatrical motion picture distribution and one-third of basic cable programming, including roughly 50 of the country’s most-watched cable channels.
“For more than a century, Paramount and Warner Bros. have squared off as fierce competitors,” Bonta said. “Who knows what those movies would have been like if not for the competition driving the distributors to produce their best work?”
He said the merger would weaken movie theaters’ negotiating leverage, forcing exhibitors to pay more for films while leaving consumers with fewer choices.
“There is no debate here,” Bonta said. “This merger would snuff out competition, drive up prices, diminish content quality and produce fewer movies and shows each year.”
Beyond economic issues, Bonta argued the deal would have broader implications for journalism.
“This merger will mean fewer journalists informing the electorate,” he said. “It’ll mean fewer opportunities for Americans to hear the full breadth of information and opinions on a subject. It’ll mean fewer documentarians, filmmakers, showrunners, producers, writers and artists shedding light on important stories that too often go untold.”
Bonta also addressed a report that Paramount could consider moving operations out of California if the merger is blocked, dismissing the suggestion as “a last-ditch effort to try to blackmail my office and the attorneys general into allowing an illegal merger to go through.”
“If your business plan involves breaking the law, it’s not a very good business plan,” he said. “A legally compliant Paramount and legally compliant Warner Bros. can and will continue to thrive here in California, but there is no negotiating on the legal compliance part.”
Asked why states were pursuing the case after federal regulators approved the transaction, Bonta criticized the Trump administration’s antitrust enforcement.
“The Trump administration has absolutely dropped the ball. Worse than dropping the ball. It would be better if they just did nothing,” said Bonta. “They’re definitely doing nothing, but also they’re affirmatively making things worse.”
The lawsuit was filed by California along with attorneys general from Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington.
Earlier in the day, Paramount defended the transaction in a statement to TheWrap, saying it “will strengthen Paramount’s ability to compete in a rapidly evolving media landscape” and create greater value for consumers, employees and shareholders.
