State AGs prepare antitrust suit to block Paramount's $110B WBD deal

Paramount Skydance faces a multistate antitrust lawsuit as soon as next week that threatens to upend its $110 billion acquisition of Warner Bros. Discovery, people familiar with the legal process said.

"We continue to engage constructively with regulators, including State Attorneys General, and are prepared to address any legitimate antitrust issues," a Paramount spokesperson said. "We are confident this transaction raises no such concerns."

The deal, already cleared by the Justice Department last month, carries an enterprise value of about $110 billion. Oregon Attorney General Dan Rayfield's office this week withdrew a court motion seeking a 60-day pause on the merger after Paramount agreed not to close before July 22, according to Reuters. The broader multistate coalition, likely led by California's Rob Bonta and New York's Tish James, is expected to argue the combination would harm competition across entertainment and news.

If the lawsuit proceeds, it could delay or derail what would be the largest media merger in years, combining Paramount's CBS and film studio with Warner Bros.' movie studio, CNN and HBO. The legal challenge echoes a similar coalition that successfully froze Nexstar's $14 billion takeover of Tegna earlier this year, a case now under appeal.

Political Undercurrents Shape the Challenge

The legal offensive comes as critics accuse the state attorneys general of pursuing a politically motivated case against a deal backed by President Donald Trump's allies. Paramount Skydance is controlled by the Ellison family — David Ellison, the company's chief executive, and his father Larry Ellison, a prominent Trump supporter who donated more than $50 million to Republican campaigns in the 2024 election cycle. Trump's DOJ antitrust division approved the merger in record time last month, drawing scrutiny from Democratic state officials who have probed Paramount's lobbying of the administration, according to people familiar with the matter.

"The case is a dud on antitrust grounds," one person briefed on Warner Bros. Discovery's legal strategy said, speaking on condition of anonymity to discuss internal deliberations. "There's very little overlap when you combine these companies." Lawyers for Warner Bros. Discovery recently briefed top executives on the risks, concluding the antitrust arguments are weak on legal metrics and that consumer-pricing concerns are negligible given the rapid changes in the media industry.

Regulatory Hurdles Beyond US Borders

Paramount also faces regulatory scrutiny abroad. UK Culture Secretary Lisa Nandy said last month she was "minded to intervene" in the deal, while antitrust authorities in numerous other countries have already cleared the transaction. Paramount has argued that the merger would create a stronger competitor to dominant global streaming platforms like Netflix, which has more than 280 million subscribers, and Amazon, expanding consumer choice and increasing investment in content.

"Antitrust authorities around the world have carefully reviewed this transaction, clearing it or concluding that it does not violate any competition laws," a Paramount spokesperson told CNN. "That regulatory record shows what the facts, the law and the economics make clear: this transaction will create a stronger challenger to dominant global streaming and technology platforms."

This article is for informational purposes only and does not constitute investment advice.