California Leads 12-State Lawsuit to Block Paramount-WBD Merger

California Attorney General Rob Bonta is leading a 12-state lawsuit to block the $111 billion acquisition of Warner Bros. Discovery by Paramount. Bonta argues the merger would create unlawful market concentration in theatrical releases and cable licensing, potentially causing 5,000 to 10,000 job losses and a $3 billion economic decline in Los Angeles County.

Bonta criticized the United States Department of Justice for conducting a review he described as not rigorous. While Paramount initially offered behavioral remedies, such as committing to a specific number of theatrical releases, Bonta rejected these in favor of structural remedies like divestitures. To avoid a $7 million daily fee starting October 1, Paramount is now negotiating a settlement that may include the divestiture of Comedy Central, protections for CNN's editorial independence, and a commitment to produce 30 films annually.

Tensions escalated when Paramount CEO David Ellison suggested the company might relocate jobs and economic contributions out of California if a settlement is not reached. Bonta characterized these warnings as hypocritical, though Governor Gavin Newsom and Los Angeles Mayor Karen Bass have expressed a preference for a settlement to prevent the company's exit. The parties have agreed to a trial next summer if negotiations fail.