U.S. states concerned that Paramount's $110 billion acquisition of Warner Bros. Discovery would harm competition could sue to block the deal as soon as next week, two sources familiar with the matter told Reuters.
California Attorney General Rob Bonta has taken the lead in investigating whether the merger violates U.S. antitrust laws. A spokesperson for Bonta’s office declined to comment. Paramount did not immediately respond to a request for comment.
The proposed combination of two of Hollywood’s major studios has drawn sharp criticism from actors, writers, and others in the industry who fear widespread job losses. Theater owners strongly oppose the deal, warning it would reduce the number of films released, limit consumer choice, and erode competition. Warner Bros. produces blockbuster franchises such as “Harry Potter” and “Superman,” while Paramount Pictures is behind many other major releases.
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| David Ellison |
A court challenge could significantly delay the deal and increase costs for Paramount, which is expected to carry roughly $80 billion in debt once the transaction closes. Ellison has agreed to pay Warner Bros. Discovery shareholders a 25-cent-per-share “ticking fee” — totaling about $650 million per quarter — if the deal does not close before October.
The potential state lawsuit follows a Reuters report in early June that California, New York, and other states were preparing legal action amid heightened scrutiny of large mergers as federal antitrust enforcement has eased. Analysts have noted that Paramount’s political connections, including CEO David Ellison’s father — billionaire Oracle co-founder Larry Ellison — and his ties to President Donald Trump, may have helped smooth federal regulatory approval.