Cinema United and other organizations which have opposed Paramount’s attempted mega-merger with Warner Bros. Discovery applauded the move by 12 state attorneys general on Monday to sue to dam 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 shall be significant and lasting, not only in Hollywood, but on Foremost Streets across this nation where local movie theaters function cultural and financial cornerstones for communities of all sizes,” president and CEO Michael O’Leary said in a press release.
Cinema United has long opposed a mega-merger of one other major Hollywood entity with Warner Bros., claiming that such a transaction would concentrate an excessive amount of power within the hands of a single distributor. The group shouldn’t be only concerned about bargaining power, but in regards to the diversity and variety of movies that may be released annually were two major distributors to merge. (Paramount Skydance CEO Ellison has promised to release a minimum of 30 movies theatrically a 12 months across Paramount and Warner Bros. Discovery, which he says will operate as studios independently, if the merger is consummated.)
Cinema United’s take is very salient provided that, of their lawsuit, the state regulators argued that the theatrical market, specifically, can be harmed by a discount in owners of wide-release, high-grossing movies. They claimed that the mega-deal would raise prices for consumers, reduce the quantity of projects in theaters and throttle the variety and quality of entertainment.
Together with California, attorneys general for Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, Latest Jersey, Latest Mexico, Latest York, Oregon and Washington joined the suit filed in California federal court on Monday.
Equally vocal on the alleged evils of corporate consolidation within the entertainment industry has been the Writers Guild of America, the union representing film and tv 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 a while.
“That is one among the worst proposed mergers we’ve seen. We’ve been very clear from day one which combining Warner Bros. Discovery with Paramount threatens our members and this industry, and should be blocked,” Writers Guild of America West president Michele Mulroney said in a press release.
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 of consolidation and 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 can be an absolute, unmitigated disaster.”
Ahead of Monday’s announcement, the American Economic Liberties Project, a nonprofit dedicated to antitrust policy, had helped organize a series of town halls for industry staff against 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 wealthy guys who run Paramount can say what they need, however the individuals who actually work for them know that it will kill jobs and screw over the small businesses which are the lifeblood of this industry. I hope the states win and win fast, because these people need it,” the previous FTC commissioner said in a press release.
In response to Monday’s lawsuit, Paramount alleged that the lawsuit would help shield tech giants like Apple and Amazon in addition to the dominant streaming company, Netflix, from competition and that a blocked transaction would lead to consequences for entertainment staff and consumers.
However the merger’s opponents aren’t convinced. Latest York mayor Zohran Mamdani got within the motion on Monday, posting on the social platform X that he was “proud” that Latest York is one among the states participating within the suit. He added, “Latest York’s staff helped construct this industry. They shouldn’t be sacrificed for the sake of further corporate consolidation.”