12 states challenge Paramount's takeover of Warner, say merger would
'extinguish competition'
[July 14, 2026] By
WYATTE GRANTHAM-PHILIPS
NEW YORK (AP) — Twelve states sued to block Paramount’s takeover of
Warner Bros. Discovery on Monday, arguing that the $81 billion merger
would “extinguish competition” in Hollywood and lead to fewer choices
for consumers across the U.S.
“Audiences on every sofa and in every movie (theater) seat would feel
the impact of this unlawful merger,” California Attorney General Rob
Bonta, who is leading the case, said in a news conference from Los
Angeles. He said the deal would result in higher prices, fewer movies
and TV shows and lower quality of content overall.
A Paramount-Warner combo would bring together two of Hollywood's last
five legacy studios. It would also mean putting Warner's HBO Max,
libraries filled with fan favorites like “Harry Potter” and even CNN
under the same roof of Paramount-owned CBS and the Paramount+ streaming
service.
In Monday's complaint, the states said such a tie-up would also “inflict
substantial harm” on movie theatres and basic cable distributors.
Bonta's office said the states are asking Warner and Paramount to not
close this merger “until after the judicial process concludes." And if
the companies do not agree, the coalition would then file a temporary
restraining order.
Paramount said Monday's lawsuit “distorts settled antitrust law" and
maintained that its merger would instead create a "stronger competitor
against dominant streaming and technology platforms who have harmed the
market for theatrical exhibition and jobs in the entertainment
industry.”
The company, which was bought by Skydance just last year, vowed to
“vigorously defend” the transaction.
Warner deferred to Paramount for comment. Beyond California, states
joining Monday's lawsuit include Arizona, Colorado, Connecticut,
Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York,
Oregon and Washington.
Where Paramount's takeover of Warner stands
Monday's antitrust case arrives at a pivotal time for the
Paramount-Warner transaction — which, after months of what became a very
public bidding war with Netflix, received shareholders’ stamp of
approval in April and then a blessing from President Donald Trump's
administration just last month.
The companies have hoped to close their deal sometime in the third
quarter of this year, recently signaling an effort to complete the
process in the coming weeks. The states’ lawsuit could throw a wrench in
those plans, at least for now.
The clock is ticking. Paramount also pledged to give shareholders some
compensation if that process isn’t complete by Sept. 30 — in the form of
a 25-cent per share “ticking fee” for every quarter past that date. And
it’s agreed to a regulatory termination fee of $7 billion.
Beyond the U.S., Paramount has touted additional regulatory clearances
it says it’s received in a handful of other countries, including China,
Canada and Australia. Meanwhile, other reviews remain in progress,
including in the European Union and the U.K. — which has separately
suggested it may intervene.
Including debt, Paramount’s proposed purchase of Warner is valued at
nearly $111 billion (or $31 per share) based on current outstanding
shares.
Critics decry merger
Warner and Paramount argue that merging will be good for growth in the
industry and give consumers access to more content, especially if HBO
Max and Paramount+ libraries are combined. But critics have decried what
further consolidation could mean in an industry already controlled by
just a few major players.
Monday's lawsuit from the states pointed to movies that make their way
into theaters and the wider TV landscape — noting that a combined
Paramount-Warner could control nearly a third of both the theatrical
film distribution market as well as basic cable programming.
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The Paramount Pictures water tower is seen in Los Angeles, Dec. 18,
2025, with the Hollywood sign in the distance. (AP Photo/Jae C.
Hong, File)
 Such a combination would create “a
massive company with unprecedented power and influence over news and
entertainment across the globe,” said New York Attorney General
Letitia James, who is among those challenging the deal. Beyond
consumer impacts, she also said the merger would “put jobs and
businesses nationwide at risk.”
Thousands of actors, directors, writers and other industry
professionals have already voiced “unequivocal opposition” to the
deal. Monday's challenge garnered applause from groups like the
Writers Guild of America, who warn that consolidation would result
in "fewer jobs, lower wages for entertainment workers, less variety
of programming, and higher prices for consumers”
Paramount argued on Monday that delaying the merger “will only harm
entertainment workers who have already suffered over recent years as
technology has disrupted their livelihood."
The company added that the states' case would “shield” larger
streaming rivals like Netflix from meaningful competition.
Political questions
Throughout Paramount's quest for Warner, questions of political
influence have also piled up — with criticism falling largely along
party lines in Washington. No Republicans signed on to the states’
case on Monday.
Democrats have long expressed skepticism about whether regulators
working under Trump would scrutinize the deal as heavily. Several
attorneys general joining Monday's lawsuit took aim at the Justice
Department's decision to not challenge the deal — pointing in
particular to the president's close relationship with the
billionaire family of Paramount CEO David Ellison.
“Something happened and perhaps that something had to do with a
mega-billionaire named Ellison," Arizona Attorney General Kris Mayes
told reporters on Monday. “We are seeing more and more instances
where the Trump DOJ is just rolling over for corporate
consolidation," she added.
Last month, DOJ leadership released a lengthy statement in support
of the deal — maintaining a Paramount-Warner combo would “increase
competition across the media and entertainment ecosystem, with
benefits for American consumers and workers.” The Justice Department
had maintained that politics would not play a role in its review.
Trump himself previously made public comments about Warner’s future,
despite backpedaling on what he once suggested his personal role
would be in approving a merger.
Many eyes are on CNN, a network that has long attracted ire from
Trump and his allies.
Paramount’s CBS has already seen significant turmoil and shifts in
editorial leadership since coming under Skydance ownership last year
— and if Warner merger goes through, the reach of that could grow.
Several Trump administration officials have also been far from shy
from sharing their hopes for CNN under Paramount ownership, with
Defense Secretary Pete Hegseth telling reporters in March that “the
sooner David Ellison takes over that network, the better.”
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Mikella Schuettler contributed from Phoenix.
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