Paramount and Warner Bros sued to block $110bn mega merger

A significant story is unfolding on the international scene. Paramount and Warner Bros sued to block $110bn mega mergerImage source, Getty ImagesImage caption, Warner Bros is headquartered in Burbank, California. ByFrancisco VelasquezBusiness reporterPublished20 minutes agoA dozen US states have joined together to block the $110bn (£85bn) merger between Warner Bros. and Paramount, claiming the largest media consolidation in Hollywood history would stifle competition and raise consumer prices.

A group of states, led by California, have filed a lawsuit to halt the deal. California Attorney General Rob Bonta claimed the merger would end up harming "audiences on every sofa and movie theater seat in the US". If it goes ahead, the new company would account for over a quarter of major film releases.

The Details

Together with Disney, Universal, and Sony, just four conglomerates would control 86% percent of that market. Combining Paramount and Warner Bros would end a century of fierce rivalry between two of Hollywood's biggest hitmakers. Between them, they own legendary franchises like Harry Potter, Batman, Mission: Impossible, and Top Gun, alongside TV giants like CNN, MTV, and Nickelodeon.

The regulatory challenge marks a significant hurdle for the entertainment giants as they attempt to merge operations. In June, the US Department of Justice had approved the merger. But the coalition of attorney generals has requested that the companies halt the transaction pending judicial review, threatening a temporary restraining order if they do not comply.

If approved, the combined titan would control nearly a third of the US theatrical motion picture market and basic cable programming. Bonta claimed it "would lead to higher prices, lower quality, and less content for film and television, harming movie theaters, basic cable distributors, and ultimately, audiences on every sofa and movie theater seat in the US". The legal challenge focuses on three main areas: major cinema releases, massive blockbusters, and cable TV channels.

What Experts Say

The states argue that losing this competition strips movie theaters and television networks of vital bargaining power. At present, if one studio demands unfair prices, a distributor can walk away and deal with the rival. Without that option, the lawsuit argues that theaters and TV networks will face higher fees – costs that will eventually hit consumers through pricier tickets, high cable bills, and fewer choices.

"Nothing justifies these substantial harms to competition," the lawsuit states. However, supporters of the deal point out that the traditional media world is in crisis. Cable TV audiences are shrinking rapidly, and cinema attendance faces intense, ongoing pressure from tech giants and streaming platforms, making scale an economic necessity.

In a statement, Paramount described the lawsuit as "fundamentally flawed" and "wrong," adding that it would "vigorously defend the transaction".

The story has become one of the most prominent items on the global agenda.