12 States File Antitrust Lawsuit to Block Paramount-Skydances $110 B Acquisition of Warner Bros. Discovery

On Monday, attorneys general from California, Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington filed a federal lawsuit seeking to halt Paramount Skydance’s $110 billion purchase of Warner Bros. Discovery (WBD). The suit argues that the merger would violate the Clayton Act by eliminating competition between two of the industry’s five major film distributors.

The lawsuit was filed in the Northern District of California and cites several potential harms. It claims that the combined entity would leave only four studios—Disney, Sony, Universal and the new Paramount‑WBD conglomerate—to control more than 85 % of wide‑release theatrical films in the United States. The complaint also says the merger would damage movie theaters, basic cable distributors and ultimately audiences nationwide.

Paramount Skydance, formed in August 2025 after the merger of Skydance Media and Paramount Global, announced its intent to acquire WBD in April 2026. The deal was approved by the U.S. Department of Justice on June 12, 2026, which stated that the transaction was “not likely to result in harm to competition or American consumers.” The DOJ’s decision was based on an analysis that the merger would not create a monopoly and would not significantly raise prices.

In response to the lawsuit, a Paramount Skydance spokesperson said the complaint “reflects a fundamentally flawed application of the antitrust laws and is wrong on both the facts and the law.” The company added that regulators in more than two dozen other countries had cleared the merger.

The states’ argument is rooted in the Clayton Act’s prohibition on mergers that substantially lessen competition. California Attorney General Rob Bonta, who led the lawsuit, said the merger would “snuff out competition, drive up prices, diminish content quality, and produce fewer movies and shows each year.” He also noted that the combined studio would have the incentive and ability to lower costs by suppressing writers’ wages and reducing output.

The Writers Guild of America filed a separate lawsuit on the same day, alleging that the merger would give the new Paramount‑WBD entity the power to lower writers’ wages and cut employment opportunities.

Industry context shows that the merger would not create the largest studio in terms of output. Disney sold the most movie tickets in 2025, accounting for 27 % of all tickets sold, slightly ahead of the combined Paramount‑WBD output. In 2023, Universal released more films than Paramount and WBD combined. Paramount’s CEO David Ellison has pledged that the merged company will release 30 films per year, a level that a study estimated would generate $12.7 billion in economic activity.

The lawsuit raises questions about the role of state governments in regulating federal mergers. While the DOJ cleared the deal, the states argue that federal antitrust law should also consider the broader impact on the entertainment ecosystem, including theaters and cable distributors.

The merger, if completed, would be the largest in Hollywood history and would reduce the number of major studios from five to four. It would also combine two of the industry’s largest film distributors, potentially concentrating a significant share of the market.

The lawsuit is currently pending in federal court. Paramount Skydance has stated that it will continue to pursue the merger while the litigation proceeds. The DOJ’s approval, the states’ lawsuit and the WGA complaint together illustrate the complex regulatory environment surrounding large media consolidations.

The outcome of the lawsuit will determine whether the merger can proceed as planned or whether it will face additional regulatory hurdles that could delay or alter the transaction.