US states move to stop Paramount from buying Warner Bros
California and New York are getting ready to sue Paramount over its plans to buy Warner Bros. because they think it will hurt competition.
Sources familiar with the case say that several US states, led by California and New York, are preparing to file a lawsuit to stop Paramount Skydance’s plan to buy Warner Bros. for $110 billion.
The lawsuit is likely to be filed in the next few weeks. This lawsuit could rank among the largest antitrust cases filed by a state in recent years. At first, it wasn’t clear which other states would join the lawsuit.
California’s Attorney General Rob Bonta has been one of the loudest people who are against the deal. Bonta criticized what he called President Trump’s “abdication” of federal antitrust agencies on Thursday. He said that states are being forced to take the lead on competition regulation more and more.
Not long after Paramount announced its plan to buy Warner Bros., following a bidding war that allegedly included Netflix, Bonta began an investigation. On Friday, a spokesperson for the office of the California Attorney General said that the review is still going on but would not say anything else.
When Reuters first announced that the lawsuit was going to happen, Warner Bros. Discovery stock dropped. By the afternoon, shares were down 3.6%. There was a 6.7% drop in Paramount Global stock.
Even though challenges to mergers don’t always work, going to court can seriously slow down deals if they can’t close while the case is still going on.
If the deal doesn’t go through by October, Paramount has agreed to pay the owners’ compensation. Not long ago, the business said that these payments would add up to about $6.9 million every day.
A Paramount representative supported the merger by saying that it would make the entertainment business more competitive.
“Any attempt to stop a deal that clearly helps consumers, creators, and the industry as a whole will be met with strong opposition,” the spokesperson said.
The company has promised that both studios will stay open and that they will make at least 30 movies a year after the deal is done.
The planned deal would merge two of Hollywood’s four major film studios. Actors, writers, and movie theater owners oppose the deal, fearing job losses and reduced competition.
Cinema owners have said that combining Warner Bros. and Paramount Pictures, which are known for titles like Harry Potter and Superman, would limit the number of movies that theaters can show and give customers fewer options.
