Paramount-Warner Bros. Merger Is Challenged in Court by California and 11 Other States

A coalition of 12 Democratic states including California, New York and Washington filed a lawsuit Monday to block Paramount’s $111 billion acquisition of Warner Bros.Discovery, the most serious legal challenge to date for one of the biggest media deals in history.In their lawsuit, which was filed in U.S.

District Court for the Northern District of California, the states argue that the deal would harm movie theaters by damaging the competitive market for distributing films, including blockbusters that generate a large portion of studio revenues.The lawsuit also claims that the deal would give the combined company anti-competitive power over the market for distributing basic cable TV channels, like CNN.“The merger will end this competition permanently,” the states said in the lawsuit.

“The likely result is higher prices, lower quality and less content for film.”The states are seeking to freeze the deal, which was scheduled to close in the third quarter of the year, while the lawsuit is being adjudicated.That could be costly for Paramount, which has agreed to pay Warner Bros.

shareholders $650 million for each quarter the deal doesn’t close, starting in October.The merger would harm “movie theaters, basic cable distributors and ultimately audiences on every sofa and movie theater seat in the U.S.,” Rob Bonta, the California attorney general, who is leading the lawsuit, said in a statement.A spokeswoman for Paramount, Melissa Zukerman, said in a statement that the lawsuit “is wrong on both the facts and the law.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access.If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe....