Paramount Skydance’s plan to take over Warner Bros. Discovery is facing a new hurdle, as several states are suing the company to prevent the proposed $111 billion acquisition. In total, 12 state attorneys have formed a coalition to stop the merger, citing that it’ll be a violation of the a violation of the Clayton Act antitrust law that was designed to block monopolies from forming.
“There is no debate here: This merger will snuff out competition, drive up prices, diminish content quality, and produce fewer movies and shows each year,” California Attorney General Rob Bonta said (via THR). Alongside California, the lawsuit also includes state attorneys from Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington.
In response, Paramount Skydance claims that the lawsuit represents a “fundamentally flawed application” of antitrust laws, and it still maintains that the merger will allow it to better compete with entertainment giants like Netflix. The streaming giant had originally intended to purchase Warner Bros. Discovery, but intense lobbying by Paramount and the offer of a higher purchase price to shareholders eventually saw Netflix pull out from the deal.
The states have also argued that the movie market will be disrupted, as Paramount will potentially control more than 30% of the movies hitting theaters. This could result in cinemas having to make changes that will harm their bottom line, like caps on discounts, less investment in improving their facilities, and being forced to raise ticket prices if Paramount Skydance decides to charge a larger fee for their films.
“Movie theatres rely on competition between Paramount and Warner Bros,” the complaint from the states reads. “Through this competition, theatres incentivize creativity and quality, and they secure competitive prices and terms for themselves and for audiences.”
While Paramount Skydance stands to gain valuable film IP, film studios, sports properties, and television networks from the deal, it’ll also become the owner of Warner Bros. Games. This will give it access to various franchises and studios, like Hogwarts Legacy developer Portkey Games, Mortal Kombat studio NetherRealm Games, and much more. Paramount CEO David Ellison is a noted gamer, and the company is already involved in gaming projects like the upcoming Call of Duty movie.
Recently, Paramount Skydance announced a new in-house game development studio, Paramount Games Studio, and some of its upcoming projects include Marvel 1943: Rise of Hydra and a Star Trek horror game with Silent Hill 2 remake developer Bloober Team.
