US states sue to block Paramount's $110bn merger with Warner

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Twelve US states have sued to block Paramount from acquiring Warner Bros. Discovery in a $110bn deal.

The states argued cinemas and moviegoers could face higher prices if the merger goes ahead, as Paramount and Warner Bros. currently compete for the best release dates and screens at thousands of cinemas across the US.

The lawsuit represents a significant obstacle for the deal, which is seen as one of the biggest media mergers in history.

"After this merger, for every dollar generated by wide-release theatrical films and basic cable channels in ‌this country, the combined company will pocket more than a quarter," the states said in the lawsuit.

They added: "This merger, in short, would create a media behemoth."

Paramount said the lawsuit distorts settled antitrust law and is based on a misrepresentation of competition in the entertainment industry.

The deal was cleared by US federal antitrust watchdogs last month, with critics saying Paramount's political connections helped the positive outcome.

Paramount CEO David Ellison's father, billionaire Oracle co-founder Larry Ellison, has cultivated ties with Republican President Donald Trump.

All the state attorneys general involved in Monday's lawsuit are Democrats.

The deal was cleared by the Department of Justice last month as it said it would benefit workers and consumers.

But Hollywood workers have criticised the deal, fearing it would hurt jobs, while cinema owners opposed it, worrying ‌it would result in fewer films.

If allowed to move forward with the deal, Paramount would control 27% of the distribution market for films that appear on screens across America, 30% of blockbuster film distribution and 27% of the market for basic cable channels, the states said.

Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington joined the lawsuit alongside California.

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