US states prepare antitrust challenge to $110 billion Paramount deal

MUMBAI: The biggest plot twist may arrive before the opening credits. Paramount’s proposed $110 billion merger with Warner Bros. Discovery is facing mounting legal turbulence, with a coalition of US states preparing a potential antitrust challenge that could delay or even derail, one of the largest media deals in recent history.

According to Reuters, a group of state attorneys general could move as early as next week to block the transaction, arguing that combining two of Hollywood’s biggest studios could significantly reduce competition across the film, television and broader media industries.

The investigation is being led by California Attorney General Rob Bonta, whose office is examining whether the merger breaches antitrust laws by concentrating excessive market power within a single entertainment company. While Bonta’s office declined to comment on the possibility of litigation, the multi-state probe signals growing scrutiny despite the deal already receiving federal antitrust clearance last month.

If completed, the transaction would bring together Paramount Pictures and Warner Bros. under Paramount Skydance, led by chief executive David Ellison. The combined entity would span film studios, broadcast television, cable networks, streaming platforms and digital media assets, creating one of the world’s largest entertainment companies.

The proposed merger has drawn criticism from across the entertainment ecosystem. Actors, writers and other creative professionals fear further consolidation could shrink employment opportunities, reduce the number of buyers for film and television projects, and narrow avenues for new talent. Theatre owners have also opposed the deal, warning that combining the studios behind franchises such as Harry Potter and Superman with Paramount’s film business could result in fewer theatrical releases and reduced consumer choice.

Paramount has pushed back against those concerns, maintaining that the merger is essential to compete in an increasingly fragmented media landscape dominated by global streaming and technology companies. The company argues that pooling resources will strengthen its ability to attract audiences, creative talent and investment. Ellison has also sought to reassure cinema operators by stating that the combined studio intends to release around 30 films annually.

The state-level challenge comes even after federal approval, highlighting the independent authority state attorneys general retain to contest mergers they believe may harm competition. Analysts note that California, New York and several other states have adopted a more aggressive antitrust stance in recent years, particularly in large technology and media transactions.

Adding another layer of uncertainty, Oregon Attorney General Dan Rayfield has separately asked a court to postpone the merger by 60 days while his office reviews additional documents related to the transaction. Paramount has told the court it does not intend to close the acquisition before 22 July.

A prolonged delay could prove costly. According to Reuters, Paramount has agreed to pay Warner Bros. Discovery shareholders a 25-cent-per-share “ticking fee,” equivalent to roughly $650 million every quarter, if the transaction is not completed before October. Following the merger, the combined company is also expected to carry approximately $80 billion in debt, raising the financial stakes as legal challenges continue to gather momentum.