Washington, 11 other states seek to block Paramount-Warner Bros. merger

OLYMPIA – Washington State Attorney General Nick Brown said Monday that a proposed $110 billion acquisition of Warner Bros. by Paramount would “raise prices, reduce consumer choice, and cost many Americans their jobs” as he announced a lawsuit to block the deal.

Brown joined 11 other state attorneys general who allege the proposed merger would reduce competition for licensing basic cable TV channels, anticipated top-grossing theatrical film distribution, and wide-release theatrical film distribution.

The proposed merger would combine two of the largest streaming services, HBO Max and Paramount+, and news networks including CBS and CNN. The combined company would also control Paramount Pictures, Warner Bros. Motion Picture Group and DC Studios, CBS and 15 CBS-owned local television stations, HBO, Showtime and Discovery+.

According to the lawsuit, the acquisition between two of the country’s major film distributors and two of the five major basic cable companies would result in one company controlling nearly a third of theatrical movies and a third of basic cable programming.

“As the federal government fails to hold corporations accountable for anticompetitive practices, Washington and other states are stepping up,” Brown said in a statement.

Oregon Attorney General Dan Rayfield told reporters during a media conference Monday that the states would seek a temporary restraining order to stop the merger amid the legal proceedings. Rayfield had previously said Paramount had agreed not to close the deal before July 22.

“This is an industry, though, that relies on a healthy competition and a competitive marketplace,” Rayfield said. “And when two of the largest studios combine, that competition narrows.”

The Washington state attorney general’s office alleges that, following the merger, the company would control a 27% share of the wide-release theatrical film distribution market and 27% of the market for distributing basic cable channels to cable and satellite providers, thereby reducing market competition and consumer choice.

Paramount has disputed the claims of unfair competition, and a spokesperson said in a statement Monday that “in the most generous light” the lawsuit “reflects a fundamentally flawed application of the antitrust laws and is wrong on both the facts and the law.”

The statement notes that the proposed acquisition has previously received approval from 24 national and international agencies, including the Department of Justice and regulators in Australia, Austria, Brazil and Canada, among other countries.

“The combination of Paramount and WBD will create a stronger, well-capitalized, creative-first media company that is better positioned to compete with companies like Netflix that have come to dominate the industry for audiences, premium content, and creative talent,” a spokesperson for the company said. “Put simply, 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.”

In June, the Antitrust Division of the Department of Justice announced it had completed an analysis of the proposed transaction and had determined the merger was “not likely” to result in harm to competition or consumers. According to the DOJ, the eight-month investigation included the review of more than two million documents and “substantial productions of data.”