A coalition of state attorneys general is preparing a potential antitrust lawsuit aimed at slowing or blocking Paramount Skydance’s proposed acquisition of Warner Bros. Discovery, a transaction that would reshape the U.S. media industry and combine some of Hollywood’s largest film, television and news assets.
According to Reuters, attorneys general from several states, including California and New York, have been evaluating legal action over concerns that the merger could reduce competition in film production, television distribution and streaming services. The states’ review continues even after the U.S. Department of Justice concluded last month that the deal was unlikely to harm consumers or competition.
The proposed transaction, valued at approximately $110 billion, would unite Paramount Pictures, CBS, Paramount+, CNN, HBO and Warner Bros. under a single corporate structure, creating one of the world’s largest entertainment companies. Federal regulators said the combined company could enhance competition against larger technology and streaming rivals, including Netflix and Disney. However, critics argue the consolidation could further concentrate power in an industry already dominated by a small number of major players.
The New York Post, in an article by Charles Gasparino published July 11, reported that executives at Warner Bros. Discovery had been briefed on the possibility of a state antitrust lawsuit and that some supporters of the transaction believe political considerations are influencing opposition to the merger. The publication cited unnamed sources who argued that legal efforts could become part of broader political disputes ahead of the 2026 midterm elections. The claims regarding political motivations have not been independently verified.
State officials have publicly framed their concerns in competition terms. According to Reuters, investigators have examined whether the merger would increase bargaining leverage over filmmakers, television producers and other content creators, potentially leading to reduced output, fewer employment opportunities and diminished consumer choice. Labor groups and some independent theater operators have also expressed concerns about possible job reductions and decreased film production following consolidation.
The antitrust scrutiny comes amid broader debates over media concentration in the United States. The combined company would control major movie studios, broadcast networks, cable channels and streaming platforms, giving it significant influence across multiple segments of the entertainment market. Competition experts have noted that mergers involving vertically integrated media companies can raise questions about content licensing, distribution access and negotiating power with advertisers and distributors.
Read more: State AGs Prepare Antitrust Complaint Against Paramount-Warner Bros. Discovery
Although the Department of Justice approved the transaction in June, state attorneys general retain independent authority to pursue antitrust litigation under both federal and state competition laws. Former antitrust officials have noted that state-led challenges can proceed even after federal regulators decline to intervene, though such cases may face additional legal hurdles when federal authorities have already determined that a transaction is lawful.
The review process has also drawn attention to the increasing role of states in merger enforcement. In recent years, state attorneys general have pursued independent antitrust cases in sectors ranging from technology and healthcare to agriculture and media, often taking more aggressive positions than federal agencies.
Additional complications emerged this week when Oregon Attorney General Dan Rayfield withdrew a request seeking a temporary delay of the merger while his office reviewed documents related to Paramount’s regulatory strategy and lobbying efforts. Oregon officials said they continue to examine possible legal options and criticized the company’s refusal to provide certain records requested during the investigation. Paramount has maintained that the merger is lawful and pro-competitive and said it has complied with applicable regulatory requirements.
Paramount has argued that the acquisition would strengthen its ability to compete in an increasingly fragmented media environment dominated by large technology and streaming companies. Company executives have said the combined entity plans to maintain substantial content production and generate efficiencies that would support long-term investment in entertainment programming. Federal regulators echoed some of those arguments when announcing the closure of their investigation.
Despite federal clearance, the transaction remains subject to additional scrutiny in several jurisdictions, including reviews by state authorities and certain international regulators. Legal action by states, if formally filed, could delay completion of the merger and introduce new uncertainty for one of the largest media consolidation efforts in recent years.
As of July 12, no multistate antitrust complaint had been formally filed, though officials involved in the review have indicated that legal options remain under consideration and that investigations into the competitive effects of the transaction are ongoing.
Source: Reuters
