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Hollywood’s biggest proposed merger has come under legal scrutiny after 12 US states sued to block Paramount Skydance’s acquisition of Warner Bros. Discovery, arguing the deal would create excessive market power in Hollywood.
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The lawsuit claims the merger would reduce competition, increase licensing costs for movie theatres and TV distributors, and eventually raise prices for consumers.
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California Attorney General Rob Bonta is leading the legal challenge and has asked a federal court to halt the merger while the case is heard temporarily.
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Although the US Department of Justice approved the transaction in June, the state lawsuit could still delay or stop what would be Hollywood’s largest media merger.
July 14, (THEWILL) — A coalition of 12 US states has filed a federal antitrust lawsuit to block Paramount Skydance’s proposed $110 billion acquisition of Warner Bros. Discovery, creating the biggest legal challenge yet to what would become the largest media merger in Hollywood history.
Led by the California Attorney General, Rob Bonta, the lawsuit was filed in the US District Court for the Northern District of California on July 13, 2026. The states argue that combining two of Hollywood’s biggest studios would reduce competition, raise consumer prices, and limit choice across the film and television industries.
Joining California in the lawsuit are Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington.
The coalition has also asked the court to issue an emergency temporary restraining order (TRO) to prevent the companies from completing the transaction while the case is being heard. Paramount has said the deal could close as early as July 22 if there are no legal barriers.
According to the lawsuit, the merged company would control about 27% of the US theatrical film market and a similar share of the basic cable television market. The states argue this would reduce competition, giving the company greater power to raise licensing fees for movie theatres and television distributors. They say those higher costs could eventually be passed on to consumers through more expensive movie tickets and cable bills.
Bonta said the merger would lead to “higher prices, lower quality, and less content” while ending more than a century of competition between Paramount and Warner Bros.
If approved, the merger would bring together some of the entertainment industry’s biggest brands, including Warner Bros., HBO, CNN, DC Studios, Paramount Pictures, CBS, MTV, Nickelodeon, Paramount+, and HBO Max. It would also combine major film franchises such as Harry Potter, Batman, Mission: Impossible, Top Gun, Superman, and Dune under one company.
The lawsuit comes despite the US Department of Justice approving the deal in June. While the federal government cleared the transaction, state attorneys general can still challenge it under antitrust laws.
Paramount has rejected the lawsuit, calling it “fundamentally flawed.” The company says the merger is needed to compete with streaming giants such as Netflix, Amazon, and Apple, and argues it will help protect jobs and support investment in new content. It added that it will vigorously defend the deal in court.
The proposed merger has also divided the entertainment industry. Cinema United, which represents movie theatre owners, welcomed the lawsuit, saying further studio consolidation would reduce the number and variety of films released in cinemas. The Writers Guild of America also backed the legal challenge, warning that the merger could result in job losses and fewer opportunities for writers and other creative workers.
The US District Court will decide the case for the Northern District of California. Its outcome could determine whether one of the biggest media mergers in Hollywood history moves forward or is blocked.
Evi Ben Ezaga writes on entertainment, culture, and trending stories.
