LOS ANGELES: A group of 12 states sued Paramount Skydance Corp on Monday seeking to block its US$110bil bid to buy Warner Bros Discovery Inc, alleging the blockbuster Hollywood deal would leave viewers with higher prices and fewer choices for movies and television.
The antitrust lawsuit, filed in the California federal court, alleges the deal would harm competition for film distribution and the licensing of cable television channels.
California and 11 other states with Democratic attorneys general joined the challenge, creating the largest legal hurdle to the deal after the Trump administration cleared the transaction without conditions in June.
“After this merger, for every dollar generated by wide-release theatrical films and basic cable channels in this country, the combined company will pocket more than a quarter,” the states alleged in the complaint. “This merger, in short, would create a media behemoth.”
In a statement, Paramount said the lawsuit was “wrong on the facts and the law” and it would vigorously defend the transaction in court.
“This merger will create a company capable of investing more aggressively in premium content, theatrical releases, and creative talent at a time when those investments matter more than ever.”
In a news conference held against the backdrop of the iconic Hollywood sign in Los Angeles, California Attorney General Rob Bonta blasted what he called “back door deals” trampling on consumers and free markets.
“This merger would snuff out competition, drive up prices, diminish content quality and produce fewer movies and shows each year,” Bonta said. “Antitrust enforcement is democracy’s check on oligarchy.”
The merger has been the subject of intense lobbying in Washington as executives, including Paramount head David Ellison, have sought to curry favour with President Donald Trump and other administration officials.
The Justice Department declined to challenge the deal last month, issuing a closing statement that the transaction wasn’t likely to harm competition. — Bloomberg
