Key Points
- The WGA sued July 14 in federal court to block Paramount's $110 billion Warner Bros. Discovery takeover.
- Twelve state attorneys general filed a parallel antitrust suit on July 13.
- The states allege the deal violates the Clayton Act and sought a restraining order.
- The Justice Department had cleared the merger a month earlier.
The proposed $110 billion merger of Paramount Skydance and Warner Bros. Discovery now faces two lawsuits filed within a day of each other, as organized labor and a coalition of states move to block a deal the Justice Department had already cleared.
On July 14, the Writers Guild of America West and East jointly sued in the U.S. District Court for the Northern District of California, arguing the tie-up violates antitrust law and would harm writers. Per Deadline, the complaint warns that "the merged Paramount-Warner Bros. entity would have both the incentive and the ability to lower costs by suppressing writers' wages and reducing output."
A day earlier, 12 Democratic state attorneys general — from California, New York, New Jersey and nine other states — filed their own suit and a motion for a temporary restraining order. As CNBC reported, they allege the merger would breach the Clayton Act by reducing competition in the distribution of wide-release theatrical films and the licensing of cable channels. The filings escalate a fight that began when the AGs first signaled a challenge and after Paramount outlasted Netflix for the asset.
A writers' union and 12 state enforcers are now aligned against the same deal the DOJ cleared, moving the fight from Washington to the courtroom and to the labor market a Paramount-WBD combination would concentrate.
In August, two Republican attorneys general asked the Supreme Court to throw the 12-state suit out entirely.
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