A group of 12 Democratic state attorneys general is suing to block Paramount Skydance’s merger with Warner Bros. Discovery, arguing that the transaction violates antitrust law by giving the combined company undue power in three markets: wide-release theatrical distribution, blockbuster movies and basic cable television.

Paramount says the lawsuit “distorts established antitrust law” and that the company will “vigorously” fight the challenge. On Monday night, the states filed a motion requesting a temporary restraining order that would halt the proposed Paramount-WBD merger pending the outcome of their antitrust litigation. Separately, the WGA on Tuesday sued to block Paramount’s deal for Warner Bros., arguing it would reduce writers’ pay and limit job opportunities.

So do state attorneys general have a case, and could it result in Paramount having to make certain assurances or concessions to close the deal with Warner Bros.?

The lawsuit alleges that the scale of Paramount-WBD’s monopolization would be around (or just under) 30% for each of the three markets, which is the minimum threshold historically necessary to win an argument that such consolidation will harm market participants.

On its face, state prosecutors’ case is strong, said Sam Weinstein, a professor at Cardozo School of Law and former Justice Department antitrust lawyer. “It’s not a frivolous claim. If they can back up what they say, it’s a compelling case,” he said, adding as a caveat that it remains to be seen what evidence the states will present to back up their claims.

Eric Talley, a professor at Columbia Law School, said on the “Daily Variety” podcast that the case is “apparently quite plausible and fits very comfortably among many similar types of complaints that have been filed in both the media and other industries.”

Listen to the full episode of the “Daily Variety” podcast here

“So this is a hurdle that I think Paramount Skydance, David Ellison and Warner Bros. Discovery are going to have to deal with,” Talley said. “And it could well play an important delaying role, if not a supporting role, in this agreement.”

State attorneys general, including California’s Rob Bonta, also sued to block Nexstar’s acquisition of television station group rival Tegna, and this spring won a court injunction blocking the companies from proceeding with their merger integration. “It seems to me that in recent years the memo has been lost in the record that state attorneys general have the same ability to challenge a merger under the Clayton Act as the federal government,” Talley said.

Historically, it is unusual for states to take the lead in antitrust enforcement actions. Typically, you would see a joint state-federal case with the Justice Department leading the charge, Weinstein noted. However, after the Trump administration’s Justice Department approved the deal between Paramount and Warner Bros. without any conditions (apparently over the objections of the department’s career antitrust lawyers), “the states felt they had to act on their own,” Weinstein said.

Talley said his assumption is that attorneys general will get a court, at least temporarily, to halt the closing of the Paramount-WBD transaction “until a little more work has been done on the discovery portion of this case.” He added that if settlement negotiations do occur, they could take any form, possibly with some concessions from Paramount.

But some legal experts say it’s unclear whether the states will prevail.

“I’m not 100% sure this will be successful,” said Syracuse University law professor Shubha Ghosh. Variety. Generally, he said, courts have been deferential in allowing mergers to take place across the board. Furthermore, a judge might consider that the AG case too narrowly defines the markets in question. A court’s analysis could consider factors such as streaming and AI, and how they influence the competitive dynamics of the industry.

Distribution of entertainment content is “not just limited to movie theaters or basic cable,” Ghosh said, but is also happening on YouTube and other streaming platforms. “The courts could respond and say there is still jurisdiction.”

Others think states have an uphill battle. “Due to the nature of the movie business, the case relies on flexible—and highly debatable—metrics of market share and market power when it comes to distribution,” according to Reuben Miller, head of antitrust at M&A news and data firm Dealreporter. He said the lawsuit also doesn’t help the claim that Paramount’s cable channels, which include MTV, Nick and Comedy Central, constitute “must-see” programming.

The state AGs’ case does not focus on the highly competitive streaming market, where Paramount-WBD together would not have a dominant share. Paramount has noted that its subscription streamer Paramount+ along with WBD’s HBO Max would have a 10.8% market share in the US (as of December 2025), well behind Netflix (32.5%) and behind Disney (16.7%) and Amazon (15.3%).

A growing number of streaming platforms compete with a variety of other entertainment options, said Jennifer Huddleston, senior technology policy researcher at the Cato Institute think tank. That competition includes not only cable TV and traditional movie theaters, but also user-generated content, such as short videos on TikTok and Instagram Reels or longer videos on YouTube, Huddleston said: “Any challenge should focus on the impact on consumer well-being and not on favoring certain competitors or less successful elements of the market.”

The success of the case will depend on whether the judge hearing it is persuaded by the arguments that Paramount-Warner Bros. will have anticompetitive control in the identified markets. He has been assigned to Judge Araceli Martínez-Olguín of the United States District Court for the Northern District of California, a Biden appointee who previously worked at the ACLU and the National Immigration Law Center. Martínez-Olguín is the judge hearing a lawsuit brought by Paramount+ subscribers who say they face higher prices and reduced viewing options as a result of the Warner Bros. merger.

Weinstein cautioned against reading too much into the case that is assigned to a judge who may be perceived as politically inclined. “All things being equal, judges in antitrust cases tend to be more apolitical than, for example, in civil rights cases,” he said.

Columbia’s Talley noted that Paramount has committed to paying a “ticking fee” of 25 cents per share to shareholders for each quarter that the deal is not completed after Sept. 30, equivalent to about $650 million in cash value each quarter. “September happens before November, which is when elections are held,” he said on the “Daily Variety” podcast. “So I think it’s very likely that we’ll see a little bit of a delay at least until the November election.”

To some extent, the states’ antitrust case “is a proxy war for broader issues that are emerging,” Talley said. One question that is “very, very hard to ignore right now” is: How does the federal government interact with and control the media?

Paramount and CBS “have been moving in a particular direction,” he said. “A lot of the assets of the Warner Brothers discovery, particularly CNN, haven’t moved in the same direction. And so I think on some level, whether you distill this as an antitrust battle or almost as a battle for the cultural hearts and minds of the American and state public, this is almost certainly going to play at least a subtextual role in the antitrust case as well.”