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States sue to block Warner Bros and Paramount merger worth $110bn
The coalition of attorney generals asked the companies to pause the deal, warning of a temporary restraining order if they do not comply while the case is reviewed.
A dozen US states have filed a legal action to stop a $110bn merger between Warner Bros and Paramount, arguing the deal would create the largest media consolidation in Hollywood history and damage competition.
According to BBC Business, California Attorney General Rob Bonta said the combined company could ultimately raise consumer prices, end up stifling quality and content, and harm movie theaters and basic cable distributors. The states argue that removing the ability to switch between rival studios would reduce bargaining power for theaters and television networks, leading to higher fees that could flow through to audiences via pricier tickets and cable bills.
The lawsuit highlights competition across three areas, major cinema releases, large blockbusters, and cable TV channels. It also notes that if the merger proceeds, the new company would account for more than a quarter of major film releases, with four conglomerates controlling 86% of that market alongside Disney, Universal and Sony.
The states asked Paramount and Warner Bros to halt the transaction pending judicial review, threatening a temporary restraining order if they do not comply. Paramount described the lawsuit as fundamentally flawed and wrong, according to BBC Business.