Other US states set to join action that seeks to block $110bn deal
US states including California and New York are preparing to file a lawsuit against Paramount Skydance’s acquisition of Warner Bros Discovery (WBD).
The $110bn deal, which was agreed following a tumulutuous six-month pursuit, has been opposed by officials of both states while thousands of on and off-screen talent including JJ Abrams, Kristen Stewart and Ben Stiller were among stars to sign a letter earlier this year that claimed the acquisition would “threaten the sustainability of the entire creative community.”
Hollywood state California and New York will be joined by other as-yet unnamed states in filing a lawsuit against the deal in the coming weeks, Reuters reported.
Rob Bonta, attorney general for California, has been a prominent critic of the deal from the outset when he promised a “vigorous” review of the acquisition that was struck in February.
Last week, he accused the country’s antitrust agencies of an “abdication” of responsibility over the deal, with the comments coming as the US Department of Justice prepares to issue its own decision on the deal soon.
News of the lawsuit sent shares of both companies down on Friday, with Paramount dipping 4% and WBD down 3%.
Paramount landed its deal with WBD following stiff competition from Netflix. As part of its improved offer, the David Ellison-led US studio promised a ‘ticking fee’ element, which will see shareholders in the HBO owner receiving around $650m each quarter after 30 September until the transaction closes.
The acquisition is also facing competition scrutiny in other countries, including the UK, where it will bring streamers Paramount+ and recently launched HBO Max under the same ownership, as well as UK broadcaster 5 and a host of production assets.
European Union (EU) officials have already indicated they are looking at the impact of the deal on creatives, with Paramount applying for EU approval last week.
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