Paramount Skydance faces lawsuit as 12 state attorneys general seek to block Warner Bros. Discovery acquisition
The Paramount Skydance Warner Brothers merger was met with lawsuits from 12 different states. According to CNBC, California Attorney General Rob Bonta is leading the group of 12 people.
A group of 12 state attorneys general announced Monday, July 13, that Paramount Skydance’s Warner Bros. He filed a lawsuit challenging his offer to buy Discovery.
The legal action comes just weeks after federal regulators concluded the merger was unlikely to harm competition, setting off a new fight over one of the entertainment industry’s biggest consolidation efforts.
California leads coalition challenging Paramount Skydance deal
Accordingly CNBCThe lawsuit was filed Monday by a coalition of 12 state attorneys general and led by California Attorney General Rob Bonta.
The states argue that the proposed acquisition raises antitrust concerns and are trying to block the transaction from proceeding through the courts.
Representatives for Paramount and Bonta did not immediately respond to requests for comment.
The legal challenge was expected, with CNBC’s David Faber previously reporting that the lawsuit was expected to be filed Monday.
Paramount Skydance merger approved by US Department of Justice
The lawsuit was filed despite the transaction receiving approval from the U.S. Department of Justice’s Antitrust Division in mid-June.
After reviewing the proposed acquisition, federal officials concluded that the merger did not present sufficient antitrust concerns to justify blocking it.
“The Division has completed its analysis of the proposed merger of Paramount and Warner Bros. and, based on the evidence obtained in its investigation, has determined that the transaction is unlikely to harm competition or American consumers,” the department said in its decision.
The merger has also received approval from various international jurisdictions, but regulators in the European Union are continuing their evaluations.
The European Commission set a tentative deadline of July 22 for the review after Paramount offered concessions to address regulatory concerns.
Paramount Skydance and Warner Bros. Consequences of the Discovery merger
If the acquisition is completed, Paramount will sell its film studio, television assets and broadcasting businesses to Warner Bros. By combining it with Discovery’s entertainment portfolio, it will create one of the largest media companies in the world.
The combined company will bring Paramount+, HBO Max, CBS, MTV and BET to Warner Bros. companies such as CNN and TNT. It will combine it with Discovery brands.
Paramount CEO David Ellison previously said Paramount+ and HBO Max will operate as a single streaming platform upon completion of the transaction.
The merger will also create the largest television network portfolio in the United States and significantly expand the company’s reach in the broadcast, cable and streaming businesses.
Shareholder approval received but review ongoing
Warner Bros. Discovery shareholders approved the proposed acquisition in April, and Ellison later stated during an earnings release that the deal would be completed by September.
But the transaction has faced sustained scrutiny from lawmakers in both the U.S. and Europe, including questions about aspects of the financing behind Paramount’s bid.
The latest lawsuit adds another layer of uncertainty as the companies try to complete the acquisition.
Hollywood’s concerns about consolidation and employment
The proposed merger sparked controversy in Hollywood; Critics have warned that further mergers could reduce competition, result in fewer movies being released and lead to job losses in the entertainment industry.
Ellison sought to reassure the industry by promising that the combined studio would release 30 films a year while remaining committed to preserving jobs.
