In 2022, the US Department of Justice (DOJ) successfully argued that Simon & Schuster’s proposed acquisition of Penguin Random House would harm competition among book publishers as they compete for the rights to books expected to be bestsellers.
California Attorney General Rob Bonta, who is leading a coalition of states in the largest legal challenge against the merger to date, He said “The illegal merger of these two entertainment giants will result in higher prices, lower quality, and less content for cinema and television, hurting movie theaters, essential cable distributors, and, ultimately, audiences on every couch and movie theater seat in the United States.”
The lawsuit also says that after the proposed merger, just three distribution companies would control 75% of the broadband theatrical films and 27% of the market in basic cable TV licensing.
Prosecutors in the US District Court for the Northern District of California said the merger would violate Section 7 of the Clayton Act, which prohibits business mergers and acquisitions that significantly reduce competition or create a monopoly.
“In this country, no one is above the law,” Bonta said. “With this lawsuit, California and our sister states are fighting for free and fair markets, not rigged markets. America has no kings in government or in our economy.”
New York Mayor Zahran Mohammadani expressed his pride that his state opposes the deal, which he said is “not a merger that serves the public.”
Free Press media advocacy group Confirm Besides reducing competition between film distribution companies, the merger would create a “media giant” that would also include control of CBS — which Skydance Media CEO David Ellison acquired last year after his company merged with Paramount — and CNN.
The Free Press said the merger would give tech mogul Larry Ellison and his family – allies of President Donald Trump’s administration – “the ability to shape public discourse at the direction of the president in exchange for regulatory approval.” “That’s why administration officials, like Defense Secretary Pete Hegseth, publicly encouraged the Ellisons to acquire CNN, based on their documented promises to make ‘sweeping changes’ to the network to please Trump.”
In the wake of Ellison’s takeover of CBS, the leadership of newly appointed right-wing editor Barry Weiss was condemned by First Amendment advocates, as Weiss sought to reshape CBS News — lifting a “60 Minutes” segment on Trump’s mass deportations and firing the leadership of the flagship investigative news program.
“President Trump and his cronies want to fast-track this anti-competitive deal because David Ellison has proven time and time again that he will leverage his control of his media empire to silence Trump critics and amplify MAGA propaganda,” said Jessica Gonzalez, co-CEO of the Free Press, thanking state attorneys general for their legal challenge. “This is corruption, plain and simple. “Any merger of this magnitude would reduce creativity and diversity in entertainment, weaken the ability of journalists to hold those in power accountable, and further endanger our democracy.”
“This is especially true when the Ellison family is in power,” Gonzalez said. “To gain approval for their takeover of CBS News, the Ellisons promised to eliminate hard-hitting reporting across the network — and they gladly followed through. They would do the same to undermine editorial independence at CNN if they took control of the global news network.”
Although the proposed Paramount merger has already been approved by 20 countries and territories globally, and the Trump-era Justice Department has claimed that the creation of a larger media empire is “unlikely to harm competition or the American consumer,” regulators in the UK and EU are leaning toward looking more closely at the deal. The lawsuit “means that this corrupt merger is still far from a done deal,” Gonzalez said.
“Although the administration will not take a position against the president’s billionaire friends, we can still stop Ellison’s power grab,” Gonzalez said. “While Paramount flaunts its corruption and toasts Trump officials, we stand with the workers and artists at the heart of the news and entertainment industries — and with the American people, who deserve a diverse, independent media system that works for them, and against the self-interest of greedy billionaires and unethical politicians.”
The lawsuit also followed a series of meetings held in Los Angeles, New York and Atlanta by the American Economic Liberties Project, titled “Main Street vs. Integration.” Antitrust advocates heard from entertainment professionals, small business owners and others who might be affected by the Paramount-Warner Bros. deal.
Comedian Adam Conover to caution At one city council meeting, it was stated that the merger would lead to higher broadcast prices, and writers and other media workers expressed concerns that the deal would lead to mass layoffs.
“I’ve spent the last month meeting with workers and business owners who will be affected by this deal.” He said Alvaro Bedoya, senior counsel for the American Economic Liberties Project, said Monday. “The rich people who run Paramount can say what they want, but the people who work for them know this will eliminate jobs and destroy small businesses that are the lifeblood of this industry. I hope the states win and win fast, because these people need them.”
Lawsuits challenging mergers typically take at least several months and up to a year to be decided by a judge, and states require companies to put a freeze on the proposed merger deal — which was scheduled to close in the third quarter of 2026 — while the case is decided. California also said it would seek a temporary restraining order if the companies did not agree to pause the deal.
Paramount agreed to pay Warner Bros. shareholders $650 million. Discovery for each quarter in which a deal was not completed, beginning in October.
“This illegal merger will mean layoffs for artists and workers, higher prices for consumers, and the death of Hollywood,” said Matt Stoller, research director at the American Economic Liberties Project. “Our nation’s law enforcement did the right thing in seeking to stop it. It is time to stop the few from stripping our culture and selling America off for parts. Preventing this massive merger is the first step in doing so.”
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