US states eye antitrust lawsuit against Paramount’s Warner Bros acquisition, says report

A group of US states, led by California and New York, is preparing a lawsuit to block Paramount Skydance’s proposed $110 billion acquisition of Warner Bros, according to a Reuters report.

The lawsuit could be filed within the coming weeks. While the full list of participating states has not yet been confirmed, the legal challenge would represent one of the most significant efforts by state governments to take the lead on antitrust enforcement, the report said.

The planned lawsuit comes amid growing scrutiny of the deal from state officials concerned about competition in the entertainment industry.

California Attorney General Rob Bonta has emerged as one of the most vocal critics of the proposed merger. Earlier this week, Bonta accused President Donald Trump’s administration of effectively stepping back from aggressive antitrust enforcement, arguing that states may need to play a larger role in policing corporate consolidations.

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A spokesperson for Bonta’s office said on Friday that California’s investigation into the merger remains active but declined to provide further details.

Merger faces growing regulatory pressure

The proposed acquisition would combine Paramount Pictures and Warner Bros, two of Hollywood’s four major film studios. Supporters of the deal argue that greater scale is necessary to compete with dominant streaming platforms, particularly Netflix.

However, critics contend that the merger could reduce competition across the film and entertainment industry. Concerns have been raised by actors, writers, and other industry groups who fear potential job losses and consolidation of creative decision-making.

Cinema operators have also voiced opposition, arguing that a combined Paramount-Warner entity could reduce the number of films available to theaters and weaken competition in movie distribution.

Financial stakes increase

The legal challenge could significantly delay the completion of the transaction, even if the lawsuit ultimately fails. Courts can issue temporary orders preventing a merger from closing while legal proceedings are underway, potentially extending the timeline by several months.

The delay could prove costly for Paramount. According to the report, the company has agreed to begin paying shareholders compensation if the merger has not been completed by October. According to company disclosures, those payments would amount to approximately $6.9 million per day.

Meanwhile, the US Department of Justice is expected to reach a decision on the merger in the near future. In March, federal investigators issued subpoenas seeking information on how the deal could affect film production, content licensing, streaming competition and movie theaters.

Paramount has strongly defended the transaction, arguing that it would enhance competition rather than reduce it. The company has pledged to keep both studios operating and maintain a minimum output of 30 theatrical films annually after the merger closes.