Jul 14, 2026
A coalition of 12 Democratic states have filed a lawsuit to block Paramount’s $110 billion acquisition of Warner Bros, arguing the merger would hurt movie theatres and the entertainment industry. The media giant is reportedly considering leaving California.
The move is the most serious legal challenge the massive media deal has faced to date. The states, which includes California, New York and Washington, argue the deal will negatively impact the competitive market for film distribution, harming moving theatres. The complaint alleges with fewer distributors, movie studios could pressure theatres for a greater share of ticket revenue.
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“This $110 billion dollar proposed merger, the largest merger in Hollywood history, would extinguish competition,” California Attorney General Rob Bonta said at a news conference Monday, while standing in front of the Hollywood sign. “It would result in higher prices, lower content quality and fewer movies and TV shows.”
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The states are seeking to freeze the acquisition while the lawsuit is being adjudicated.
The Paramount-Warner Deal
The deal would merge two of the country’s five major film distributors and concentrate ownership of cable television networks. If completed, the deal would mean Paramount CEO David Ellison would control two news networks, CBS News and CNN, two movie studios and two streaming services, Paramount+ and HBO Max.
Paramount has already secured approval for the deal from 20 countries and regions globally, though other regulators are still looking into it. The European Union’s antitrust enforcer says the media giant agreed to make some concessions to quell concerns around competition. This month, British regulators said the United Kingdom is leaning towards examining the deal.
This lawsuit comes after Paramount declined a request from the states to freeze the acquisition. According to the filing, Paramount told Califonia the deal could close as soon as July 22. States have requested the courts respond to the suit by July 21.
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Paramount’s next move
Paramount has responded to the lawsuit, saying it is “wrong on both the facts and the law,” claiming states are misrepresenting competition in the entertainment industry.
“Any attempt to block this transaction undermines the very principles antitrust law is designed to promote: more competition, more choice for consumers, and more opportunities for creators and workers,” a Paramount spokesperson said according to CNN.
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The media giant has argued the deal will boost competition in Hollywood and said it’s necessary to compete against other giants like Amazon, Apple and Netflix.
The delay in the deal could also cost Paramount. Ellison has agreed to pay Warner Bros. Discovery shareholders a 25-cent-per-share fee if the deal does not close by October. That amounts to about $650 million in cash each quarter.
The lawsuit comes one day after reports that Paramount is considering leaving California. On Sunday, Semafor reported that “friends and advisers” of Ellison have been urging him to relocate headquarters out of the state if California took legal action. Paramount’s departure would move $30 million in planned spending out of the state.
According to Semafor, no decision has been made yet regarding a move. Paramount did not respond to Moneywise’s request for comment in time for publication.
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Rinna Diamantakos is an assigning editor at Moneywise.com. A versatile journalist, she has experience as a writer, editor and producer. Her work has focused on politics, business and financial news.
