$30B Investment In Limbo After Attorneys General Sue To Stop Paramount, Warners Bros. Merger

Twelve attorneys general sued to stop the merger of Paramount and Warner Bros. Discovery, saying the union violates antitrust laws. 

The AGs have joined forces to block Paramount’s $111B grab for Warner Bros. Discovery, which would destroy competition between the two entities and impact movie theaters, cable distributors and consumers, according to a statement from California AG Rob Bonta’s office. 

“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 seat in the U.S.,” Bonta said in a statement.

Paramount CEO Larry Ellison is reportedly considering relocating the company’s headquarters and reallocating a majority of its $30B in planned spending outside of California.

The merger would also affect nearly 100M SF of real estate globally, much of it studio space. 

Warner Bros. owns a 2.6M SF film and television complex in Burbank, California, which holds 31 soundstages and 11 sets on the 110-acre main lot. Another Warner Bros. Burbank facility has 16 soundstages and was selected last week as the television base for the 2028 Olympics. In the UK, Warner Bros. owns a 1.3M SF complex northwest of London with 350K SF of soundstages and a 100-acre back lot.  

Warner Bros. also owns office buildings, including a nearly 3M SF combined industrial, office and studio footprint in LA. 

California was joined by the attorneys general of Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington in the lawsuit. 

Paramount challenged the premise of the lawsuit, saying it misunderstands both antitrust law and the competitive landscape of today’s entertainment industry. 

“The combination of Paramount and WBD will create a stronger, well-capitalized, creative-first media company that is better positioned to compete with companies like Netflix that have come to dominate the industry for audiences, premium content, and creative talent,” Paramount said in a statement. 

Paramount also pointed to the regulators from two dozen jurisdictions that had reviewed the merger without raising flags as proof that the antitrust argument holds no water. Putting off the merger would only further hurt the entertainment industry, it said.

“Delaying this transaction will only harm entertainment workers who have already suffered over recent years as technology has disrupted their livelihood and cost California tens of thousands of entertainment jobs,” Paramount added.

The attorneys general are asking Warner Bros. and Paramount not to close the merger until after the judicial process is completed. If they do not delay closing, the coalition said it would file for a temporary restraining order.