The deal may be done, but it is still being challenged, as 12 states, including California, are suing to block the $81 billion mega merger.
The lawsuits say the merger of Paramount and Warner Bros. would “extinguish competition” in Hollywood and threaten jobs, The Associated Press reported.
Paramount, if the deal is approved, would control 27% of the markets for films in theaters, 30% of blockbuster film distribution and 27% of the cable channel market, according to Reuters.
Deadline reported that not only will the competition be cut under the deal, but people may also lose their jobs as the company deals with debt.
The case is being led by California’s Attorney General, Rob Bonta, and is demanding that the deal not be closed “until after the judicial process concludes,” and if they don’t agree, the states will file a temporary restraining order.
Other states joining the coalition include Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington, Deadline reported
Paramount released a statement after the lawsuit was filed, which read in part that the challenge “is based on a misrepresentation of competition in the entertainment industry today. As numerous antitrust authorities around the world have already concluded after months of review, this transaction creates a stronger competitor against dominant streaming and technology platforms who have harmed the market for theatrical exhibition and jobs in the entertainment industry. This merger will create a company capable of investing more aggressively in premium content, theatrical releases, and creative talent at a time when those investments matter more than ever.”
The company, however, told The New York Times before the lawsuits were filed that it would address “legitimate antitrust issues,” but the Warner Bros. deal “raises no such concerns,” adding “We are confident the facts and the law support this transaction, and we will continue to defend it vigorously.”
Paramount said it plans to close the deal by the third quarter.
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