TRENTON, N.J. — New Jersey Attorney General Jennifer Davenport has joined a coalition of 12 attorneys general in filing a lawsuit to block Paramount Skydance Corporation’s proposed $110 billion acquisition of Warner Bros. Discovery, arguing the merger would reduce competition, increase prices and limit entertainment choices for consumers.
The lawsuit, filed in the U.S. District Court for the Northern District of California, alleges the proposed merger violates Section 7 of the Clayton Act, which prohibits mergers that may substantially lessen competition or create a monopoly.
According to the attorneys general, the merger would combine two of Hollywood’s five major film distributors and two of the nation’s five largest basic cable companies. The coalition argues the combined company would control roughly one-third of the U.S. theatrical film distribution market and nearly one-third of the basic cable programming market.
The states are asking Paramount and Warner Bros. not to complete the merger until the legal challenge is resolved. If the companies decline, the coalition said it plans to seek a temporary restraining order to halt the transaction while the case proceeds.
“New Jersey is the birthplace of the American film industry, and the state is now a burgeoning hub for film and television production. Given our state’s leadership in the film and television industry, we must protect our residents when corporate media monopolies threaten to upend the industry by raising prices and reducing content choices,” Attorney General Jennifer Davenport said. “The proposed merger between Paramount and Warner Bros. Discovery will hurt our state’s residents, plain and simple. We will always stand up against corporate monopolists that seek to exploit hardworking New Jerseyans by driving up prices and turning a massive profit at their expense.”
The coalition contends the merger would reduce competition in three key markets: wide-release theatrical film distribution, anticipated blockbuster film distribution and the licensing of basic cable television channels.
According to the complaint, the combined company would control about 27% of the market for wide-release theatrical films. Four companies — the merged Paramount-Warner Bros., Disney, Universal and Sony — would control approximately 86% of that market.
The lawsuit also alleges the merger would give the combined company control of more than 30% of anticipated top-grossing theatrical releases, while four major studios would account for more than 90% of that market.
In the basic cable market, the states argue Warner Bros. and Paramount are currently the second- and third-largest companies, and together would control about 27% of licensed cable programming.
The attorneys general argue that competition between Paramount and Warner Bros. currently benefits movie theaters, cable providers and consumers by encouraging competitive pricing, broader programming choices and investment in new film and television content. Eliminating that competition, they contend, could lead to higher prices, fewer choices and reduced investment in entertainment.
Joining New Jersey in the lawsuit are the attorneys general of California, Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Mexico, New York, Oregon and Washington.
