Attorney General Ford Secures Critical Win in Lawsuit to Block Warner Bros./Paramount Merger

Carson City, NV — Today, Attorney General Aaron D. Ford issued the following statement after the U.S. District Court for the Northern District of California granted the states’ request for a temporary restraining order halting the merger of Warner Bros. Discovery, Inc. (Warner Bros.) by Paramount Skydance Corporation (Paramount). The temporary restraining order halts the merger while the court considers a ruling on a preliminary injunction, which would block the merger for the duration of the litigation. Earlier this month, Attorney General joined a coalition of 12 attorneys general in filing a lawsuit challenging the unlawful merger, which is expected to result in higher prices, lower content quality, and fewer movies and TV shows.

 
“This is an important victory in our fight to ensure competition in our film and television industries and protect consumers’ choices,” said Attorney General Ford. “Nevadans would feel the effects at the box office and on their streaming services if these monoliths were allowed to merge and significantly reduce the market’s competition. We are happy with today’s decision, and we plan on seeing this fight through to the end.”

 
For more than a century, Warner Bros. and Paramount have stood astride the film and television industry as independent sources of creativity and competition. The proposed $110 billion merger — the largest in Hollywood history — would combine two of Hollywood’s five major film distributors and two of the five major owners of basic cable channels, extinguishing competition between Paramount and Warner Bros., and inflicting substantial harm on movie theaters, basic cable distributors, and ultimately, audiences nationwide.

The lawsuit alleges that the merger violates Section 7 of the Clayton Act, which holds that mergers that may substantially lessen competition or tend to create a monopoly are illegal. The attorneys general allege that if Warner Bros. and Paramount are allowed to merge it would lessen competition in the areas of:

• Wide Release Theatrical Film Distribution, where Warner Bros. and Paramount are two of the five major film distributors and would combine for around 27% share of the market. After the merger, only three distributors will control 75% of these films, and only four distributors (defendants, Disney, Universal and Sony) will control 86% of them.
• Anticipated Top-Grossing Theatrical Film Distribution, a submarket of theatrical film distribution focused on anticipated blockbuster films with wide audiences and large production budgets. After the merger, defendants will control more than 30% of these films, and four distributors (defendants, Disney, Universal and Sony) will control 93% of them.
• Licensing Basic Cable Television Channels, or the market for distributing basic cable channels to cable and satellite providers. Warner Bros. is the second largest and Paramount is the third largest in this market, and they would combine for a 27% share.

In filing the lawsuit, Attorney General Ford joined the attorneys general of California, Arizona, Colorado, Connecticut, Massachusetts, Minnesota, New Jersey, New Mexico, New York, Oregon and Washington.

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