UPDATE: While Paramount’s legal team was calling the states’ suit wrong on the facts and the law, its CEO was quietly courting lawmakers in D.C. on a first-ever federal film incentive the very same evening.
UPDATE 2: Paramount is now fighting on a second front. Its own shareholders have sued the Ellisons and the entire board, alleging an illegal Trump side deal cleared the way for this merger. Paramount denies it, and the restraining order hearing is set for Friday.
Bonta quoted The Godfather. Paramount answered on the newswire, and there’s nothing playful about it.
Hours after 12 states sued to block the $110 billion Warner Bros. Discovery takeover and California’s AG taunted David Ellison in a Variety op-ed, Paramount Skydance fired back with an official statement calling the lawsuit “wrong on both the facts and the law.”
The company accused the states of twisting antitrust law, promised to fight the case, and argued that delaying the merger would only protect Netflix and Big Tech while hurting Hollywood workers.
Paramount’s answer: try to stop us
The states asked Paramount and WBD to hold off on closing the deal or face an attempt to freeze it in court.
Paramount’s answer, without using the literal word, is no.
The company argues that the delay itself would cause harm, costing consumers more competition and hurting theaters and entertainment workers after California already lost tens of thousands of industry jobs.
Paramount vowed to close “as soon as possible” when the DOJ cleared the deal. It also retained Jeffrey Kessler — the litigator who beat the NCAA — months ago to prepare for this exact fight. Kessler was dismissing the states’ case before they even filed it.
The next battle is whether a federal judge pauses the closing while the lawsuit moves forward, and that hearing is now set for Friday. Warner Bros. Discovery, meanwhile, is referring all questions to Paramount. Ellison’s side is doing the fighting for both companies.
Paramount makes Netflix the villain
Paramount’s argument is the mirror image of Bonta’s.
The states see five major studios becoming four. Paramount says blocking the merger would protect Netflix and the technology companies from a Hollywood competitor big enough to challenge them.
Netflix has already helped make that case. As we previously reported, the streamer’s own approach showed why Paramount buying WBD was the better option: Netflix film chief Dan Lin admitted the company has “accepted” it simply won’t work with filmmakers who still insist on theatrical releases.
Paramount is offering the opposite pitch: more movies, longer theatrical windows and a larger traditional studio capable of competing with Netflix.
The company is also pitching the deal as a win for labor. Its release cites a letter to the DOJ arguing that more production means “more call sheets, more location days,” along with more transportation, casting and catering work.
Paramount also repeated Ellison’s pledge to release at least 30 movies a year in theaters with minimum 45-day windows.
It’s a coherent defense. It’s also exactly how Paramount needs the fight framed: Hollywood against Big Tech, not one more round of Hollywood consolidation.
The states have now answered the 30-movie pledge in federal court: their emergency brief calls it “unenforceable and implausible” and treats the buried Batgirl movie as Exhibit A.
Paramount brings receipts — but the map isn’t complete
Paramount says competition and foreign investment regulators in 24 jurisdictions have already cleared the merger or allowed it to move forward.
The company leans hardest on Australia’s competition regulator, which found that Paramount and Warner Bros. are not “particularly close competitors.” That goes directly at the heart of the states’ claim that combining them would wipe out meaningful competition.
The DOJ reached a similar conclusion when it closed its investigation without imposing conditions.
But the clearance list includes Kuwait, Montenegro and North Macedonia while leaving out two major unfinished reviews. Regulators in the United Kingdom have signaled they’re likely to intervene, and the European review is also still open, with a decision due July 22.
The regulatory map isn’t as complete as Paramount’s victory lap makes it sound.
The merger pitch comes down to survival
The most revealing part of the release comes from Paramount’s own letters to Bonta.
Paramount argued that it and WBD “lack the scale to compete effectively” with the biggest streaming services and that neither company can catch them without something transformative.
That’s the merger pitch stripped down: two of Hollywood’s Big Five admitting in writing that they don’t believe they can compete alone.
It may be Paramount’s strongest defense. It’s also the clearest admission of how weak the traditional studio system has become.
The states have already won this fight once
The lawsuit isn’t an empty threat.
The same state AG playbook won a federal injunction blocking the Nexstar-Tegna merger this spring, even after federal regulators cleared that deal.
Paramount also has an expensive clock running. If the merger hasn’t closed by September 30, the company must pay WBD shareholders a fee worth roughly $650 million for every additional quarter.
Every quarter in court means real money. Every week of uncertainty also extends the freeze at DC Studios, where the expected regime-change dominoes all depend on the merger closing.
A threat Sunday. A lawsuit Monday morning. A Bonta op-ed that afternoon. Paramount’s broadside hours later.
Four rounds in 48 hours, all fought in public. The next one belongs to a federal judge on Friday.
