Twelve States Sue To Block Paramount's Warner Bros. Discovery Takeover

(RTTNews) - A coalition of 12 U.S. states has filed an antitrust lawsuit seeking to stop Paramount Skydance Corporation's (PSKY) proposed acquisition of Warner Bros. Discovery, setting up a major legal challenge to the media merger despite its approval by the U.S. Department of Justice.

The lawsuit, filed in the U.S. District Court for the Northern District of California, argues that the deal would reduce competition, increase prices, lower the quality of entertainment and lead to fewer films and television shows being produced.

California Attorney General Rob Bonta said the merger would harm consumers and the broader media industry by concentrating too much market power.

The states involved are California, Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington. They have asked Paramount and Warner Bros. Discovery not to complete the transaction while the case is pending and said they will seek a temporary restraining order if necessary.

Paramount rejected the claims, calling the lawsuit "wrong on both the facts and the law." The company said the merger would strengthen competition by creating a larger media company better able to compete with dominant streaming platforms such as Netflix.

Paramount also noted that regulators in several jurisdictions, including the U.S. Department of Justice, have already cleared the transaction.

The lawsuit focuses on competition in theatrical film distribution and cable channel licensing, with the states arguing that the merger would reduce consumer choice and weaken competition.

Critics have also raised concerns that combining CNN and CBS News under one owner could reduce media diversity, although those concerns are not the primary focus of the legal challenge.

If the court grants the states' request for an injunction, the merger could face significant delays as the legal battle unfolds.