States prepare lawsuit to block Paramount-Warner Bros merger amid backlash

Entertainment workers came to Beverly Hills with a blunt warning: if Paramount Skydance Corp. absorbs Warner Bros. Discovery Inc., a core American industry could be hollowed out by another round of consolidation. At Lumiere Music Hall, about 100 people packed a town hall to argue that the deal would not just shuffle corporate ownership, but weaken union jobs, shrink domestic production and concentrate decision-making in fewer hands.

The event was the first stop in a three-city Main Street vs. The Merger campaign led by the American Economic Liberties Project, the Committee for the First Amendment, Democracy Defenders Action, the Future Film Coalition and the Writers Guild of America. U.S. Rep. Sydney Kamlager-Dove was among the featured speakers, alongside FCC Commissioner Anna Gomez and former FTC Commissioner Alvaro Bedoya, giving the gathering both labor and antitrust force. The mood inside the room matched the slogan on the campaign banner: workers were not treating the transaction as a routine media merger, but as a threat to the future of studio employment and the local businesses that depend on production.

The Teamsters have already pressed for enforceable safeguards on domestic production, labor standards and layoffs, arguing that the merger would combine two of the five major Hollywood studios. That concentration, they warned, would give executives more leverage over workers at a time when the entertainment business has already been battered by layoffs, streaming upheaval and the migration of production work away from Los Angeles and other U.S. hubs.

The political and legal fight widened this week as states including California and New York prepared a lawsuit to block the acquisition. California Attorney General Rob Bonta had already opened a probe shortly after the deal was announced, adding another layer of scrutiny from Sacramento to Washington. The challenge reflects a growing view among labor advocates and antimonopoly groups that the question is no longer just whether the merger can win approval, but how much more concentration the entertainment sector can absorb before competition and bargaining power are permanently damaged.

The fight is also moving overseas. Paramount Skydance formally sought European Union antitrust approval on June 2, and the European Commission set a provisional deadline of July 7 for its decision. Bloomberg reported that Paramount is open to divesting some children’s TV network assets if that helps clear European competition concerns, including possible overlaps in kids’ channels. The legal and regulatory pressure has now spread across two continents, while the public debate has sharpened further after Paramount chief legal counsel Makan Delrahim accused some opponents of the deal of holding antisemitic views.