The $110B Megamerger Frozen: Why Some States Just Sued to Stop Paramount and Warner Bros.

If you are a filmmaker, screenwriter, or crew member working in Hollywood, the constant wave of consolidation has definitely affected your career.

We've seen so many mergers and so many places shutter that it's been hard for many of us to find work and to maintain our networks.

The news of the Paramount and WB merger sent a lot of us into a spiral, because it felt like more of the same, but California Attorney General Rob Bonta led a coalition of 12 State AGs in filing a major antitrust lawsuit to block this merger.

Deadline has the lawsuit for you to read, but the main takeaway is that it draws a line in the sand and says this merger will kill jobs.

Let's dive in.

What the States Are Saying

Basically, we've heard over and over again that in a Trump America, this merger was going to be pushed through by the federal government no matter what. A lot of us felt like we should just get it over with so we could find a new normal faster in these roaring 20s, but thankfully, not everyone listened to the naysayers.

Now, the Justice Department under the Trump administration has already given the merger its green light. But Bonta and attorneys general from 11 other states (including New York, Washington, Arizona, and Colorado) decided to join in the fight.

The core of their argument relies on the Clayton Act of 1914, which bans mergers that "substantially lessen competition."

According to Bonta, combining two of the industry’s "Big Five" film distributors and cable titans would lead to:

• Squeezing Movie Theaters: The combined company would control roughly 30% of the market for wide-release "tentpole" movies. This leverage would allow the mega studio to dictate harsher box office splits. That can drive up concessions and ticket prices.
• Driving Up Cable and Streaming Costs: The other thing here is that Paramount would control HBO, CNN, and Nick, and would be able to drive up the cost of streaming packages, including all of these networks.
• Fewer Projects & Fewer Jobs: This was theb ig one. When you merge two giant companies, jobs inevitably will go away. And when you have as much debt as Paramount will, the fastest way to pay it off is through layoffs.

The Paramount Response

Paramount has fired back with a statement saying, "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.”

Though they have not outwardly threatened, the big worry is that if these states have a problem with it, the Ellisons could just uproot Paramount and take it to another state, like Florida, Texas, or Georgia.

That's what they did back in the day with Oracle when they ran into these kinds of problems.

But on a recent episode of The Town, Bonta pushed back on the idea that they would spend all this money and then spend even more to take the company away from Hollywood itself.

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The Clock is Ticking (and It's Expensive)

Paramount Skydance has vowed to "vigorously defend" the transaction, calling the lawsuit "fundamentally flawed."

And the AGs are willing to fight back. The legal delay itself is a massive weapon for the states, as it puts all the pressure on Paramount and creates a ticking clock.

If the deal does not close by September 30th, 2026, Paramount must pay shareholders a "ticking fee" that is around $7 million a day, but only has to pay of the deal doesn't close.

We will keep you updated as this monumental antitrust battle unfolds in federal court.

Let me know what you think in the comments.