The combined entity would control CBS, Paramount Pictures, MTV, Nickelodeon, BET, Comedy Central, Paramount+, HBO, Max, CNN, Warner Bros. film studio, DC Entertainment, TNT, TBS, Discovery, HGTV, and Food Network — making it one of the largest vertically integrated media companies in the world.

A coalition of twelve state attorneys general, led by California, filed suit on July 13, 2026 in the U.S. District Court for the Northern District of California (Case No. 4:26-cv-07116). The states seek a permanent injunction blocking the merger under Clayton Act § 7.

The complaint identifies three markets where the states allege the merger would substantially lessen competition:

1. Distribution of wide-release theatrical films in the United States
2. Distribution of high-grossing theatrical films in the United States
3. Licensing of basic cable television channels in the United States

Cable channel concentration. The states allege that the combined company could control more than one-quarter of all major basic cable channels in the United States by revenue. This concentration would give the merged entity outsized bargaining leverage over television distributors — cable operators, satellite providers, and virtual MVPDs — enabling it to extract higher license fees that would ultimately be passed through to consumers in the form of higher monthly bills.

Content market foreclosure. The complaint alleges that combining two of the largest film studios (Paramount Pictures and Warner Bros.) with two of the largest premium streaming platforms (Paramount+ and Max/HBO) creates a vertically integrated entity capable of foreclosing independent producers and competing distributors from key content pipelines and distribution windows.

Reduced output and investment. The states argue that consolidation will reduce the number of films produced, shrink content investment, and diminish employment opportunities for creative workers across the industry.

The Writers Guild of America East and Writers Guild of America West filed a separate federal antitrust lawsuit on July 14, 2026, also seeking to block the merger.

The WGA's complaint applies a monopsony theory to the market for writers' services: Paramount and WBD are two of the largest buyers of scripted television, streaming content, and theatrical screenplay writing. A merger would:

• Reduce the number of major competing buyers of WGA-represented writers' services
• Suppress wages, residuals, and overall compensation
• Diminish the union's bargaining leverage in future contract negotiations
• Concentrate editorial and algorithmic control over what content gets produced and distributed

The WGA frames this lawsuit as a direct continuation of the structural concerns that drove the 2023 WGA strike — the longest Hollywood writers' strike in decades. That strike resulted in a new contract addressing minimum staffing requirements for writers' rooms, streaming residuals, AI protections, and viewership data transparency. The WGA argues that the consolidation trend in Hollywood — accelerated by Disney/Fox, AT&T/Time Warner, Discovery/WarnerMedia, and Viacom/CBS — has systematically reduced the number of employers competing for writers' services, and that this merger would represent a further and decisive step in that direction.

The simultaneous existence of three distinct legal challenges — the DOJ review (now closed), the 12-state AG lawsuit, and the WGA lawsuit — creates an unusual procedural landscape.

The DOJ Antitrust Division closed its review on June 12, 2026, concluding that the transaction did not present a substantial risk of harm to competition. This is the standard federal merger review outcome that, in most transactions, effectively clears the path to closing.

State attorneys general have independent authority to challenge mergers under federal antitrust law (the Clayton Act) and, in some states, under state competition statutes. A state AG coalition is not bound by the DOJ's decision to close its review. The states can:

• File suit in federal court in their own jurisdiction
• Seek a preliminary injunction halting the merger pending trial
• Pursue the case to final judgment regardless of DOJ's position

A federal court injunction — even a temporary one — would prevent the parties from closing the transaction until the litigation is resolved.

The WGA, as a private plaintiff, has standing to sue under the Clayton Act independently of both the DOJ and the state AGs. Private antitrust suits can proceed simultaneously with government actions. A successful WGA challenge would establish significant precedent for applying labor market antitrust theory to future media and entertainment mergers.

The parties have targeted Q3 2026 closing. Prolonged litigation creates material financial risk:

• If the transaction does not close by October 2026, Paramount may be required to pay WBD shareholders a delay fee of approximately $650 million for each rolling three-month period
• Debt financing commitments carry their own expiration timelines and repricing risk
• Integration planning costs and management distraction accumulate with each month of delay
• The combined entity's projected cost synergies — estimated in the billions — are deferred for every quarter the deal remains open

ULF New York monitors U.S. antitrust, M&A, and media transactions. This update is prepared for informational purposes and does not constitute legal advice. For transaction-specific antitrust, M&A, or entertainment law counsel, contact our New York office.