Red states try to stop suit against Paramount Skydance

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(The Center Square) – Attorneys general from two Republican-led states have asked the U.S. Supreme Court to throw out an antitrust lawsuit seeking to block Paramount Skydance’s acquisition of Warner Bros. Discovery.

The antitrust lawsuit was brought by California Attorney General Rob Bonta and his fellow Democratic attorneys general from 11 other states. Bonta, a Democrat, has claimed the $110 billion merger would extinguish competition and limit viewers' choices.

"It would result in higher prices, lower content quality, and fewer movies and TV shows,” said Bonta in a July 13 announcement covered by The Center Square. “Movie theaters, basic cable TV distributors, and audiences on every sofa and in every movie seat would feel the impact of this unlawful merger.”

Still, two Republican attorneys general - Brenna Bird of Iowa and Austin Knudsen of Montana, a state where many Westerns have been filmed - say their Democratic counterparts are using politicized enforcement to veto a merger that’s already been cleared by the U.S. Department of Justice and regulators in other countries.

“Attorney General Bird is fighting to protect Iowans from higher streaming costs and fewer entertainment choices because California, once again, refuses to stay in their lane,” said Jen Green, communications director for the Office of Iowa Attorney General.

“Federal antitrust enforcers, 68 regulators around the world, Governor Newsom and Mayor Bass all think California’s lawsuit is unnecessary, at best, and harmful at worst," Green told The Center Square in an email.

The antitrust division at the U.S. Department of Justice approved the Paramount/Warner Bros. deal on June 12. Regulators at the European Union approved it on July 22.

California Gov. Gavin Newsom, a Democrat, has called for a settlement in the lawsuit amid concerns that the dispute could harm California jobs. Los Angeles Mayor Karen Bass said on Aug. 20 that “it’s time for all parties to come to the table” for negotiations.

“Productions in LA are hurting and hardworking Angelenos are out of a job because ongoing disputes over the proposed merger have stalled filming in our city,” Bass said in a news release. “Any resolution must put the long-term stability of LA-based entertainment jobs, productions and investments first. This is not about taking sides. This is about fighting for Los Angeles’ talented and unparalleled creative workforce." 

Green of the Iowa attorney general's office said “the Constitution and federal statutes mandate that State against State lawsuits be filed in the U.S. Supreme Court,” and that is what Bird has done.

Wayne Winegarden, senior fellow in business and economics at the Pasadena, Calif.-based Pacific Research Institute, said the Iowa attorney general is correct.

"If the law empowers 50 attorneys general to play M&A [mergers and acquisitions] regulator, the costs from anti-growth regulations will skyrocket,” Winegarden told The Center Square in an email. “The fact that there are no antitrust concerns with this deal only makes these issues worse."

A federal trial over the Paramount/Warner Bros. deal has been scheduled for March 2, 2027. This trial would be over the lawsuit filed by Bonta and the attorneys general of Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington.

Paramount Skydance agreed to delay the merger until June 2027.

The Writers Guild of America and the Writers Guild of America East (jointly WGA) have also filed a lawsuit over the deal.