Paramount’s planned $110 billion takeover of TNT Sports parent company Warner Bros. Discovery is facing a new challenge as a dozen states collectively sued the two media conglomerates on Monday, alleging the deal would “extinguish competition” across much of the entertainment business.
A month after the U.S. Department of Justice approved the far-reaching media deal, the states, led by California, filed a claim in U.S. District Court of the Northern District of California seeking to block the deal. The plaintiffs argued that the proposed union of Paramount—the parent company of CBS Sports—and WBD will harm consumers and employees alike.
“The unlawful merger of these two entertainment behemoths would lead to higher prices, lower quality, and less content for film and television, harming movie theaters, basic cable distributors, and ultimately, audiences on every sofa and movie theater in the U.S.,” said California attorney general Rob Bonta, who is leading the lawsuit on behalf other the states.
The complaint focuses primarily on the potential Hollywood-related impacts of the deal, and an alleged violation of federal antitrust law, but the Paramount-WBD impact also has far-reaching sports impacts. The planned combination of TNT Sports and CBS Sports would have touchpoints in nearly every major pro and college sports entity in the U.S., with the notable exception of the NBA.
“Consolidation here not only leads to higher prices—it also leads to fewer opportunities for important stories to come to life, and fewer ways for audiences to encounter stories, ideas, and perspectives beyond their own experiences,” Bonta said. “In this country, no one is above the law.”
Fighting Back
Paramount immediately fired back at the complaint, and said it “distorts settled antitrust law,” and vowed a “vigorous” defense.
“This challenge is inconsistent with sound competition policy and the competitive realities of the media marketplace,” Paramount said. “The practical effect of this lawsuit is to shield those dominant streaming platforms like Netflix and technology companies from much-needed competition, while preventing the significant benefits this transaction will deliver.”
Absent an immediate dismissal of the suit, Paramount’s intended timetable of closing the WBD deal by the end of the September could soon be at risk—even if it ultimately prevails legally. Paramount has agreed to pay WBD shareholders $650 million for every quarter, beginning in October, in which the pact isn’t closed.
WBD shareholders approved the deal in April.
The other 11 states joining California in the lawsuit are Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington.
Each one of these states have Democratic attorneys general, and politics have been a key thread throughout Paramount’s pursuit of WBD. Paramount, and particularly CEO David Ellison, have maintained close ties with U.S. President Donald Trump—a relationship reflected in part by last month’s UFC Freedom 250 from the White House South Lawn that aired on Paramount+.
