Cinema United and other organizations that have opposed Paramount’s attempted mega-merger with Warner Bros. Discovery applauded the move by 12 state attorneys general on Monday to sue to block the $111 billion deal.
Cinema United, the trade organization that advocates on behalf of movie theaters across the country and internationally, took a victory lap on the challenge to a deal it vociferously opposed, arguing that small businesses across the country would suffer. “The ramifications of further movie studio consolidation will be significant and lasting, not just in Hollywood, but on Main Streets across this nation where local movie theaters serve as cultural and financial cornerstones for communities of all sizes,” president and CEO Michael O’Leary said in a statement.
Cinema United has long opposed a mega-merger of another major Hollywood entity with Warner Bros., claiming that such a transaction would concentrate too much power in the hands of a single distributor. The group is not only concerned about bargaining power, but about the diversity and number of films that would be released each year were two major distributors to merge. (Paramount Skydance CEO Ellison has promised to release at least 30 films theatrically a year across Paramount and Warner Bros. Discovery, which he says will operate as studios independently, if the merger is consummated.)
Cinema United’s take is especially salient given that, in their lawsuit, the state regulators argued that the theatrical market, in particular, would be harmed by a reduction in owners of wide-release, high-grossing films. They claimed that the mega-deal would raise prices for consumers, reduce the amount of projects in theaters and throttle the diversity and quality of entertainment.
Along with California, attorneys general for Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington joined the suit filed in California federal court on Monday.
Equally vocal on the alleged evils of corporate consolidation in the entertainment industry has been the Writers Guild of America, the union representing film and television writers across the country. The union said on Monday that it had “engaged with the offices of many State Attorneys General” to argue against the merger for some time.
“This is one of the worst proposed mergers we’ve seen. We’ve been very clear from day one that combining Warner Bros. Discovery with Paramount threatens our members and this industry, and must be blocked,” Writers Guild of America West president Michele Mulroney said in a statement.
Added her counterpart from the Writers Guild of America East, Tom Fontana, “The proposed Paramount Skydance merger with Warner Bros. Discovery would create an alarming amount ofconsolidationand contraction and cause irreparable harm to our members. People will lose their jobs, their income, their homes. The damage this deal would do to America’s entertainment and news industries would be an absolute, unmitigated disaster.”
Ahead of Monday’s announcement, the American Economic Liberties Project, a nonprofit devoted to antitrust policy, had helped organize a series of town halls for industry workers opposed to the Paramount-Warner Bros. deal. Unsurprisingly, a moderator for these town halls, American Economic Liberties Project senior advisor Alvaro Bedoya, cheered on the legal challenges.
“The rich guys who run Paramount can say what they want, but the people who actually work for them know that this will kill jobs and screw over the small businesses that are the lifeblood of this industry. I hope the states win and win fast, because these people need it,” the former FTC commissioner said in a statement.
In response to Monday’s lawsuit, Paramount alleged that the lawsuit would help shield tech giants like Apple and Amazon as well as the dominant streaming company, Netflix, from competition and that a blocked transaction would result in consequences for entertainment workers and consumers.
But the merger’s opponents aren’t convinced. New York mayor Zohran Mamdani got in the action on Monday, posting on the social platform X that he was “proud” that New York is one of the states participating in the suit. He added, “New York’s workers helped build this industry. They should not be sacrificed for the sake of further corporate consolidation.”