Twelve states, including Oregon and California, sued on Monday to block Paramount’s takeover of Warner Bros. Discovery, warning the $81 billion mega merger would “extinguish competition” in Hollywood and threaten jobs across the media industry.
The office of California’s attorney general, who is leading the coalition, said the states are asking Warner Bros. and Paramount to not close their merger “until after the judicial process concludes.” If they do not agree, the coalition will then file a temporary restraining order.
“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.,” California AG Rob Bonta said in a statement.
The states argue the merger violates the Clayton Act, which Congress first passed in 1914 to halt practices that could significantly limit competition.
Joining California and Oregon are the states of Minnesota, New York, Arizona, Colorado, Massachusetts, Connecticut, Nevada, New Jersey, New Mexico and Washington.
Oregon Attorney General Dan Rayfield said his office began its own investigation looking into Paramount’s efforts to secure approval from the Trump administration for its merger with Warner Bros.
Rayfield accused Paramount of believing they’re above the law by stalling on Oregon’s demand for documents into the company’s lobbying effort, dubbed “Project Warrior.”
Oregon’s attorneys were prepared to ask a state court judge to force the company to comply with its civil investigative demand, Rayfield explained during a news conference Monday. Once Oregon decided to join the multi-state lawsuit, it folded its litigation into the larger federal case and paused its efforts in state court.
“We still want, and will get, the documents that were requested under our civil investigative demand,” Rayfield said Monday. “Under Trump, the federal administration has also stepped way back from investigating and enforcing our antitrust laws here in this country, and this is why states have had to step up.”
In addition to combining film studios, the merger would put CNN and CBS under the same parent company. When Paramount took over CBS, it installed Bari Weiss as its editor-in-chief, a move that has roiled the newsroom.
“The news that we receive should not be influenced by Republicans, nor should it be influenced by Democratic influences,” Rayfield said. “It should be based upon typical journalistic integrity and the principles that follow.”
Oregon’s attorney general said the Trump administration has brought politics into a regulatory process, eroding trust.
“There is a credibility issue,” Rayfield said. “We need transparency; we need to understand how and why decisions are made, and we are in this vacuum right now where the public really believes that the decisions that are coming out of the U.S. Department of Justice are political.”
Washington State Attorney General Nick Brown warned in a statement Monday that if the merger goes through it “would raise prices, reduce consumer choice, and cost many Americans their jobs while enriching billionaires and C-suite executives.”
The states filed their lawsuit in the U.S. District Court for the Northern District of California.
Paramount responded to the lawsuit in a statement saying it “in the most generous light, reflects a fundamentally flawed application of the antitrust laws.” The company, which was acquired by Skydance Media last summer, said the merger with Warner Bros. is about creating a company that can compete with streaming giants, such as Netflix.
Paramount called the lawsuit “wrong on both the facts and the law” and said it “will vigorously defend the transaction and demonstrate that this challenge is inconsistent with sound competition policy.”
Last month, the Oregon Legislature approved 16 new positions to beef up antitrust enforcement efforts at the state Department of Justice.
The Associated Press contributed to this article.
