Paramount Subscribers Sue to Block Warner Bros. Merger Over Antitrust Concerns

Five Paramount subscribers have filed a lawsuit to block the planned acquisition of Warner Bros. by Paramount Skydance, alleging antitrust violations. The lawsuit was filed on Thursday in the U.S. District Court for the Central District of California.

The plaintiffs claim that if the Paramount-Warner Bros. merger is completed, it will give the combined company the ability and incentive to raise prices, reduce film output, narrow release slates, lower quality, and worsen consumer-facing terms. This includes tighter control over distribution, exclusivity, windowing, and licensing.

“If Paramount’s proposed acquisition of Warner Bros. Discovery is consummated, the combined firm would have increased ability and incentive to reduce theatrical film output and narrow release slates, substantially lessening competition by leaving moviegoers with fewer theatrical titles, less genre and budget variety, and fewer meaningful alternatives at local theaters.”

The lawsuit arrives as Paramount Skydance aims to finalize the merger by the end of September. The company has publicly expressed confidence in meeting this deadline. If the deal is delayed, Warner Bros. Discovery (WBD) shareholders will receive a 25-cent per share “ticking fee” for each quarter until closing. Should the merger fail entirely due to regulatory hurdles, Paramount has agreed to pay WBD a $7 billion termination fee.

Regulatory Scrutiny and Legal Challenges

California Attorney General Rob Bonta has indicated that his office is reviewing the merger and may take legal action against it. In February, Bonta stated that the deal is not finalized and remains under regulatory scrutiny.

“Paramount/Warner Bros. is not a done deal,” Bonta wrote. “These two Hollywood titans have not cleared regulatory scrutiny — the California Department of Justice has an open investigation, and we intend to be vigorous in our review.”

The lawsuit represents the first legal challenge from consumers seeking to block the merger on antitrust grounds.