8 Big Questions to Make Sense of the Antitrust Suit Trying to Block the Paramount and Warner Bros. Discovery Merger

At $110 billion, the planned combination of Paramount and Warner Bros. Discovery is the biggest media merger of all time. Nothing about it was going to come easy.

Yesterday, 12 states drew a line in the sand against Paramount and, in an antitrust lawsuit, accused the merger of being unlawful. The states, as led by California Attorney General Rob Bonta, seek to block the entirety of the Paramount-WBD merger, a huge ask just as Paramount was gearing up to close the transaction as early as next week. The states aren’t the only ones taking a stand against this merger as, on Tuesday, the Writers Guild of America filed its own lawsuit alleging that writers will have fewer opportunities and be paid less should this deal go through.

Like Tom Cruise flying an experimental jet in “Top Gun Maverick,” we’re pushing beyond where we’ve ever been before. This lawsuit raises a lot of questions about whether this seismic shift that the industry has been bracing for for months will really happen as has been expected.

Can the Merger Still Close on Time?

Paramount has a ticking clock set for September 30 for which it will have to pay a fee to shareholders for each quarter beyond that date the transaction hasn’t closed, which could amount to millions of dollars a day. Paramount, in the wake of Monday’s lawsuit, has indicated it still intends to close this quarter. And while it surely wants to avoid costly and lengthy litigation, it wouldn’t be shocking to anyone to imagine that Paramount’s bankers likely baked into its cost this very scenario for some period of time.

So Paramount might still manage to close regardless of this suit, because the states are now seeking injunctive relief from a judge to stall this merger. Two lawyers IndieWire spoke with believe that being granted an injunction could be unlikely to achieve, as the states’ case for anti-competitive harm caused by the merger is unconventional and may be difficult to prove urgency in that regard. There’s also a distinction between the impact of blocking the transaction altogether and only modifying the merger as part of a settlement, and that’s where things could get interesting.

Can the Entire Merger Be Blocked?

The states’ lawsuit is not seeking to prevent Paramount from acquiring just a portion of WBD, it is seeking to block the entire merger, citing three markets where it believes the companies are violating the Clayton Act: theatrical movies, theatrical tentpole blockbusters, and the cable channel market. Those areas are the bread and butter of the value Paramount is getting from WBD, including WBD’s big theatrical business and IP brands, while also controlling many of the most coveted cable channels in the entire cable ecosystem.

While litigation is certainly possible, the lawyers said a more likely scenario would be a negotiated settlement, and there’s language in the suit that makes the lawyers think some backchannel discussions have already taken place. Paramount’s lawyers will make the case that, should this go to litigation, a judge should look at the entirety of the transaction for why this is a fair deal, not just the three markets that Bonta and the states have identified as potentially illegal.

“If there’s an agreement to divest of certain assets, that probably suits Paramount Skydance. I’m not going to say they would be happy to do so, but I’m sure that that’s an outcome that they can live with,” said Corey Martin, Managing Partner at Granderson Des Rochers, told IndieWire.

Rob Bonta at In This Together: Power, Partnership & Reproductive Freedom during the SXSW Conference & Festivals on March 15, 2026 in Austin, TexasZebadiah Badgett/SXSW Conference & Festivals

Will Paramount Have to Make Some Sacrifices?

Let’s discuss what those divestitures might be. The political football that has been tossed around has been CNN, and some reporting indicated that Bonta may be OK with the outcome should Paramount agree to sell the news network and not bring it under CBS News and Bari Weiss. Bonta, appearing on “The Town” podcast Monday, denied feeling that way and said it wouldn’t alleviate the larger legal issues at hand.

Could Paramount choose to sell all of its linear cable assets as a means of eliminating one of the core tenets of this antitrust suit? Cable is not the business it once was, obviously, but the thinking of Ellison and company is that having this many linear cable channels is exactly what Paramount needs in order to be able to compete on the same scale as Netflix.

Prior to WBD agreeing to sell to Paramount, it was planning to spin off its own cable assets from the studio and streaming business in the same way that Comcast and NBCUniversal did with what is now Versant. Such a scenario for the sum of Paramount and WBD’s channels could reduce the competitive leverage the state AGs are objecting to, and it could help the brands flourish.

There’s other assets Paramount could part with. To get the deal through in the European Union, Paramount is exiting a joint venture it has with Universal to release films internationally. But a combination of HBO Max and Paramount+ along with other smaller streamers like Discovery+ and Pluto would not appear to be on the table.

Why Focus on Theatrical and Cable?

Highlighting a competitive conflict in cable is not the sexiest of spaces that Bonta and the other AGs could choose to focus on, but it might be the area where antitrust harm is the most straightforward.

Ray Seilie, attorney at Kinsella Holley Iser Kump Steinsapir (KHIKS), said that the states’ cable theory relies on the same measure of harm as other successful antitrust cases, which is higher prices for consumers. The lawsuit says that a combined Paramount-WBD would control 34 percent of the U.S. cable channels, and that would give the combined entity enormous power over cable providers like Charter, Cox, or others to dictate fees for airing those channels, including the ability to black out those channels if they don’t agree, and those costs are passed along to the consumer. Very cut and dry.

The theatrical angle is a bit more nebulous and weaker, Seilie argues. Pointing to the merger of Disney and Fox, the lawsuit makes the case that there will be fewer films overall, which will then translate to theaters suffering and being unable to provide premium formats, better picture and sound quality, or even quality concessions.

“It’s not as straightforward as saying there were a lot of movies before, there are fewer movies now,” Seilie said. “You have to ask yourself if you let the business continue as it’s going right now, what’s going to happen in five years versus what’s going to happen in five years if you allow the merger to continue? Candidly, nobody really knows.”

The lawsuit also made a distinction between wide-release theatrical movies and the highest-grossing, highest-budgeted films each year, claiming that Paramount-WBD would control 27 percent of overall releases and 30 percent of all tentpoles. Seilie said firstly that it’s odd to define a market based on how successful something is, and secondly that there’s already two great examples this year in “Obsession” and “Backrooms” that would suggest high grossing films can come from other places.

“Paramount has plenty of responses,” Seilie added. “Theatrical was suffering, movie theaters were not doing well, so it’s very difficult to say that you had a healthy industry that is going to be endangered because of of this merger. Their argument would be, in fact, that you need less competition among the movies and more certainty in order to facilitate the creation of more theatrical movies intended to be shown in in theaters rather than streaming.”

Streaming is notably a market that this lawsuit does not touch on, and Seilie said it feels like a “concession” and a pivot on the part of the AGs when it looked like Netflix would be the one combining with Warner Bros. and creating a streaming behemoth. Though this combination will help Paramount compete, the combined entity still doesn’t come close to Netflix’s scale in terms of subscribers.

What Precedent Is There for Blocking a Merger?

Two recent cases in which the states specifically, not the federal government, flexed their collective muscle, was in the planned merger of Ticketmaster and Live Nation and separately with Nexstar and Tegna, both of which are ongoing in their legal battles. In the case of Ticketmaster and Live Nation, the Department of Justice actually settled with the companies, something that didn’t even happen here with Paramount-WBD, and the states still successfully sued even though they were “playing with house money,” as Martin described.

Martin said each merger is relevant in context of Paramount-WBD because of all the reasons for competitive harm that Bonta mentions in the lawsuit, namely that this will lead to higher prices for consumers and one company being able to manipulate pricing power from the distributors. He argues that when it comes to Ticketmaster-Live Nation or Nexstar-Tegna, it is abundantly clear that each company is already the “undisputed No. 1” that would now have an enormous market share and a clear ability to dictate pricing.

“Are they going to be able to control and manipulate various aspects and channels of content production in terms of deals with talent, deals with producers? If it were Netflix acquiring these assets, then certainly,” Martin said. “I just think it’s a stretch to think that they’re going to be able to control pricing power.”

David Ellison at the Paramount Pictures Presentation during CinemaCon 2026, the official convention of Cinema United held at The Dolby Colosseum at Caesars Palace on April 16, 2026 in Las Vegas, CaliforniaPMC

What About Paramount’s Promises to the Industry?

Seilie found it notable that Bonta included a paragraph in the lawsuit about some of David Ellison’s promises to release 30 movies a year theatrically between the two studios. Bonta called it unenforceable and not credible, and Seilie feels that the inclusion of that promise from Ellison suggests Bonta wants Paramount-WBD to be legally committed to that output in some way and that negotiations are likely ongoing. By noting it in the lawsuit, it opens the door for a judge to enforce a consent decree as part of a settlement that would keep Ellison to his word.

“My suspicion is this is going to, at some point, reach a settlement where the combined entity is going to have to make some credible and enforceable promises,” Seilie said. “You’re going to have a consent decree, and the merger in some form is going to go through.”

Martin argued that paragraph in the suit has more to do with the court of public opinion than actual legal standing, and sure enough, Paramount’s lawyers, in an appearance on CNBC on Tuesday, reiterated the 30 theatrical releases with a minimum of a 45-day window.

Some of the company’s other promises about jobs, which the lawsuit only alludes to, and the future of the two studio lots in Los Angeles, could be a different story.

How Real Is Paramount’s Threat to Leave California?

Over the weekend just before the lawsuit was formally announced, Semafor reported that Paramount had considered shifting the business out of California entirely should a lawsuit materialize. That’s only a report, and it even noted that nothing had been decided or finalized, but the timing is not a coincidence.

It would not be unreasonable to think Paramount could relocate its entire business to a place like Texas, where Paramount’s top creator Taylor Sheridan is based and where Ellison’s father Larry Ellison had relocated Oracle, or to somewhere like New Jersey, where Paramount recently took up massive new studio space. But even the attorneys doubted that this is anything more than an empty threat.

“Part of the reason why injunctive relief is highly unlikely, it’s very easy for these states to demonstrate that they have standing to bring this case,” Martin said. “Whether or not any of these companies is legally headquartered in California, this is still where all the talent is. This is still where a lot of the deals are getting done.”

“Until we see concrete moves to shift the state of incorporation, I would view that as posturing,” Seilie added. “Perhaps not false posturing. Perhaps it’s something they would consider if the regulatory environment became too difficult under AG Bonta or some of the other states.”

Is This All to Score Political Points?

It was not lost on anyone that of the 12 states involved in the lawsuit on Monday, all had Democratic AGs from Blue, if maybe a few Purple, states. Even some Blue states that were involved in the Nexstar-Tegna lawsuit like Illinois and Maryland were not also involved in this one, though Bonta said on “The Town” that it would not be impossible for other states to join the suit. What’s more, a Northern California Democrat judge appointed by President Biden was today assigned the states’ antitrust case.

But beyond that, President Trump has been very vocal about this merger and about CNN’s place within it. Bonta could easily be dismissed as someone just trying to get a win against a Trump ally, and no matter how strong the states’ case is, it will have a political perception issue to overcome.

“The question is, what what kind of deal are the Ellisons willing to make just to short circuit this litigation?,” Seilie said. “Because they also have the option of calling the bluff of all the states, fighting this out in court, and even if they lose in the lower court, and even if they lose in the Ninth Circuit, they have a Supreme Court who will probably be willing to back any expansive definitions of antitrust liability or anti-competitive harm here.”