Paramount said the lawsuit by 12 state attorneys general filed on Monday to block its planned acquisition of Warner Bros. Discovery will protect Netflix from “much needed competition,” and the legal principles upon which it’s based “reflects a fundamentally flawed application” of antitrust laws.
“We will vigorously defend the transaction and demonstrate that this challenge is inconsistent with sound competition policy and the competitive realities of the media marketplace. Delaying this transaction will only harm entertainment workers who have already suffered over recent years as technology has disrupted their livelihood and cost California tens of thousands of entertainment jobs,” a Paramount spokesperson said in a statement.
The spokesperson argued that the lawsuit would shield Netflix, which unsuccessfully tried to buy Warner Bros. Discovery last fall, from competition.
“The practical effect of this lawsuit is to shield those dominant streaming platforms like Netflix and technology companies from much needed competition while preventing the significant benefits this transaction will deliver for consumers, creators, workers, and the broader Hollywood economy. We will continue to fight against any attempt to derail a deal that strengthens competition, expands opportunity, and positions the combined company to compete in an increasingly competitive global media landscape,” the spokesperson said.
A dozen state attorneys general sued to block Paramount’s “unlawful” pending $110 billion merger with Warner Bros. Discovery on Monday, with California AG Rob Bonta saying they want to block the deal. “We’re going to court to fight for a free and fair market and protect this iconic industry.”
Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington are also included in the lawsuit.
The Paramount spokesperson argued that the Paramount-WBD deal is good for the industry.
“The combination of Paramount and WBD will create a stronger, well-capitalized, creative-first media company that is better positioned to compete with companies like Netflix that have come to dominate the industry for audiences, premium content, and creative talent. Put simply, any attempt to block this transaction undermines the very principles antitrust law is designed to promote: more competition, more choice for consumers, and more opportunities for creators and workers.”
In response to the lawsuit, Cinema United — the lobbying group for theatrical exhibition — threw its weight behind the attorneys general.
“We welcome the decision of the Attorneys General of multiple states to challenge the proposed acquisition of Warner Bros. Studios. The ramifications of further movie studio consolidation will be significant and lasting, not just in Hollywood, but on Main Streets across this nation where local movie theaters serve as cultural and financial cornerstones for communities of all sizes,” said Michael O’Leary, President and CEO of Cinema United.
