States go to court to stop Hollywood merger that would put CNN, CBS News under one roof
A dozen states led by Democrats are suing to stop the largest media deal in Hollywood history — a $111 billion megamerger that would place CBS News and CNN under one roof, both under the control of an ally to President Donald Trump.
Led by California Attorney General Rob Bonta, the states are challenging a proposed merger between Paramount Skydance and Warner Bros. Discovery. If it is completed, the deal would consolidate the film studios Paramount and Warner Bros, the streaming services Paramount+ and HBO Max — along with the two major TV news operations. All of it would be overseen by Paramount CEO and Trump ally David Ellison.
The state attorneys general argue that combining the companies would undermine competition in the media industry — with blockbuster films in particular.
Speaking in Los Angeles on Tuesday with the famous Hollywood sign as a backdrop, Bonta said the lawsuit is designed to block the merger from going forward. Should the merger proceed before the courts have had a chance to weigh in, Bonta’s office announced, the coalition of states will seek a temporary restraining order.
The merger “would extinguish competition, it would result in higher prices, lower content quality and fewer movies and TV shows,” Bonta said. “Movie theaters, basic cable TV distributors and audiences on every sofa and in every movie seat would feel the impact of this unlawful merger.”
Paramount said the lawsuit is “based on a misrepresentation of competition in the entertainment industry today,” and that regulators have already concluded the transaction creates “a stronger competitor against dominant streaming and technology platforms,” like Netflix. Ultimately, the company said the merger will “create a company capable of investing more aggressively in premium content, theatrical releases and creative talent.”
“We will vigorously defend the transaction and demonstrate that this challenge is inconsistent with sound competition policy and the competitive realities of the media marketplace,” the company said. “Delaying this transaction will only harm entertainment workers who have already suffered over recent years as technology has disrupted their livelihood and cost California tens of thousands of entertainment jobs.”
Why are states suing?
The lawsuit, filed in the U.S. District Court for the Northern District of California Monday morning, alleges that the merger violates a federal antitrust law that prohibits monopolies that substantially harm competition. The effects would be particularly felt in the theatrical movie business, according to the lawsuit.
The deal would cause harm, Bonta’s office alleges, by “extinguishing competition” between the film studios, “inflicting substantial harm on movie theaters” and leaving audiences with fewer options. In the U.S. alone, the merger would allow Paramount to control “nearly one-third of theatrical motion pictures,” according to Bonta’s office, “and nearly one-third of basic cable programming.”
The deal could also have significant ramifications for the news industry. If approved, television news outlets CBS News and CNN could combine operations — potentially with Ellison-appointed Bari Weiss as the top editor overseeing both.
Critics have raised concerns that the consolidation could prompt layoffs and a major programming pivot at CNN. Proponents of the merger, as well as critics, have pointed to a rightward turn at CBS News under Weiss, a longtime opinion journalist who had no experience in broadcasting before taking the CBS editor’s job. Weiss recently oversaw a shakeup at the newsmagazine “60 Minutes,” including high-profile firings and the appointment of an executive producer without broadcast news experience.
“This merger will mean fewer journalists informing the electorate,” Bonta said.
The lawsuit puts California, Nevada, New York and the other states at odds with the Justice Department. In June, the department’s antitrust division gave a greenlight to the deal, announcing that it determined after an eight-month investigation that the megamerger “is not likely to result in harm to competition or American consumers.” Senior Justice Department leaders approved the deal before career antitrust lawyers had an opportunity to object, The Wall Street Journal reported.
The lawsuit filed Monday isn’t the only roadblock standing in Paramount’s way. Global regulators, including in Europe, are conducting their own reviews.
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Ella Rae Greene, Editor In Chief
