By Rajwa Quasim
California and 11 other states have filed a lawsuit in Oakland federal court challenging Paramount’s $110 billion acquisition of Warner Bros. Discovery. The states allege that the deal would create havoc in the industry by giving the combined company the power to raise prices in the film and television markets.
Reuters reported that the states also filed a preliminary injunction to immediately block the merger while they pursue their antitrust lawsuit. The states argued that the merger would create a media giant capable of reducing competition in terms of wages and raising prices for consumers, while also harming movie theatres and television distributors.
States including New York, Minnesota, Arizona, Colorado, Massachusetts, New Jersey, Washington, New Mexico, and Nevada have joined the lawsuit. “After this merger, for every dollar generated by wide-release theatrical films and basic cable channels in this country, the combined company will pocket more than a quarter,” the states said in the lawsuit, Reuters reports.
Read: Paramount to exit California as Warner Bros. merger could face antitrust lawsuit
(July 13, 2026)
All of the attorneys general challenging the merger are Democrats. They argued that the U.S. Department of Justice’s approval of the deal last month was influenced by political connections, pointing to Larry Ellison, the founder of Oracle and father of Paramount CEO David Ellison, and his close ties to U.S. President Donald Trump. Some Democrats also view antitrust enforcement as a way to challenge the Trump administration, arguing that it has allowed large entities to wield excessive influence.
Paramount rejected the allegations, saying the lawsuit misrepresents competition in the entertainment industry and distorts antitrust law. The company further stated that the deal would increase content production while saving $6 billion by eliminating marketing expenses, corporate jobs, and unnecessary infrastructure.
According to the states, the merger would give Paramount control of 30% of the blockbuster film distribution market, 27% of the distribution market for films screened across the United States, and 27% of the market for basic cable channels.
If the deal is not completed before October 2026, Paramount will have to pay Warner Bros. Discovery shareholders a $650 million quarterly ticking fee. Even if Paramount ultimately wins the lawsuit, the legal challenge represents a major setback, according to Paolo Pescatore, an analyst at PP Foresight.