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A coalition of 12 state attorneys general is File a lawsuit To prevent the merger of Paramount Skydance and Warner Bros. Discovery (WBD), claiming the deal would hurt movie theaters, basic cable distributors and audiences.
The coalition, led by California Attorney General Rob Bonta, claims the takeover violates the Clayton Act, which prohibits mergers that would significantly reduce competition or tend to create a monopoly. If the two companies were allowed to merge, prosecutors allege, it would reduce competition in three areas: broad theatrical film distribution, “highest-grossing” theatrical distribution, and basic cable licensing.
The deal will bring together two prominent film studios as well as streaming platforms Paramount+ and HBO Max. It will also create one of the largest television network groups, combining Paramount’s CBS and MTV with WBD’s CNN and HBO.
His proposed acquisition Already received an audit From filmmakers, actors and industry professionals who argued that the deal would reduce competition and strengthen the American media industry. Paramount opposed this, saying the combined film studios would release 30 films a year.
The states argue that the deal, if approved, would give Paramount significant control over key areas of the entertainment industry, including 27% of the U.S. film distribution market, 30% of blockbuster distribution, and 27% of the basic cable market.
“Consolidation here not only leads to higher prices — it also leads to fewer opportunities to bring important stories to life, and fewer ways for audiences to encounter stories, ideas and perspectives that go beyond their own experiences,” Bonta said. statement. “In this country, no one is above the law. With this lawsuit, California and our sister states are fighting for free and fair markets, not rigged ones. America has no kings in government or in our economy.”
Paramount CEO David Ellison said last May that the deal was on track to close by September. The deal received approval from WBD shareholders in April, and was approved by the US Department of Justice, which said the deal was unlikely to result in harm to competition or consumers.
The 11 states joining California are Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington.
Paramount and WBD did not immediately respond to TechCrunch’s requests for comment.
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