Press Release  AG Campbell Joins Coalition Challenging Paramount/Warner Bros. Merger

BOSTON — Massachusetts Attorney General Andrea Joy Campbell today joined a coalition of 12 attorneys general in filing a lawsuit to block the proposed $110 billion acquisition of Warner Bros. Discovery, Inc. (Warner Bros.) by Paramount Skydance Corporation (Paramount), arguing the deal would unlawfully reduce competition in the film and television industry and ultimately harm consumers. 

For more than a century, Warner Bros. and Paramount have served as independent sources of creativity and competition in the film and television industry. The proposed merger would combine two of Hollywood’s five major film distributors and two of the five major basic cable companies, extinguishing competition between Paramount and Warner Bros., and inflicting substantial harm on movie theaters, basic cable distributors and, ultimately, audiences nationwide.  After this merger, for every dollar generated by wide-release theatrical films and basic cable channels in this country, the combined company would pocket more than a quarter. 

The coalition has asked Warner Bros. and Paramount not to close the transaction while the litigation proceeds. If the companies decline, the coalition intends to seek a temporary restraining order to prevent the merger from closing before the court can review the case. 

“Healthy competition benefits everyone – from the movie theaters and television providers that bring entertainment to our communities to the families who pay to enjoy it,” said AG Campbell. “This merger threatens to reduce competition in ways that could lead to fewer choices and perspectives – as well as higher costs. That’s why I’m joining this lawsuit to protect consumers and ensure the entertainment marketplace remains competitive.” 

The lawsuit, filed in U.S. District for the Northen District of California, 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, whereWarner Bros. and Paramount are two of the five major film distributors and would combine for over 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 market of distribution for 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 more than 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 competitor in this market, and they would combine for over 27% share by revenue.  

Currently, Paramount and Warner Bros. compete fiercely to create and distribute new, different, and high quality film and television content to American viewers. To distribute their films, they negotiate with thousands of movie theaters across the country and bargain with those theaters to secure the most coveted screens and calendar slots. This competition helps movie theaters and distributors secure more favorable prices and terms, encourages investment in new and diverse programming, and provides viewers with greater choice and innovation. 

According to the lawsuit, the proposed merger would eliminate this head-to-head competition, giving the combined company greater leverage over theaters and distributors while reducing incentives to invest in the quality, variety, and quantity of film and television content. 

In filing today’s lawsuit AG Campbell joins the attorneys general of California, Arizona, Colorado, Connecticut, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington.

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