Oregon and 11 other states say Paramount Skydance's proposed acquisition of Warner Bros. Discovery would unlawfully shrink competition in movie distribution and basic cable programming.
What happened
Oregon Attorney General Dan Rayfield and 11 other state attorneys general filed suit challenging Paramount Skydance Corp.'s proposed $110 billion acquisition of Warner Bros. Discovery Inc., saying the deal would combine major rivals in film distribution and basic cable programming.
The lawsuit, according to Oregon's announcement, was filed in the U.S. District Court for the Northern District of California and alleges the transaction would violate Section 7 of the Clayton Act, which bars mergers that may substantially lessen competition or tend to create a monopoly.
The states say the deal would combine two of Hollywood's five major film distributors and two of the five major basic cable companies. Oregon's release says the combined company would control nearly one-third of theatrical motion pictures and nearly one-third of basic cable programming in the U.S.
Rayfield framed the case as a consumer and industry-harm challenge, saying Oregonians could face "higher bills, fewer jobs, less choice at the box office, and fewer editorial voices" if the transaction proceeds. The release says the coalition is prepared to seek a temporary restraining order if Warner Bros. and Paramount do not pause the deal until the judicial process concludes.
The release identifies three alleged competition markets: wide-release theatrical film distribution, anticipated top-grossing theatrical film distribution and licensing basic cable television channels. It says Warner Bros. and Paramount would control about 27% of wide-release theatrical film distribution, more than 30% of anticipated top-grossing theatrical film distribution and 27% of basic cable channel licensing.
Oregon also tied the federal suit to its own investigation of the merger, saying Rayfield previously asked a Multnomah County judge to force Paramount to produce records sought since June, including materials related to lobbying of the White House and U.S. Department of Justice. Rayfield was joined by the attorneys general of California, Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York and Washington.