AG Brown, coalition temporarily block Warner Bros./Paramount merger as lawsuit proceeds
The U.S. District Court for the Northern District of California today issued a temporary restraining order halting the merger of Warner Bros. Discovery, Inc. (Warner Bros.) by Paramount Skydance Corporation (Paramount), in a multistate lawsuit co-led by Attorney General Nick Brown.
The temporary restraining order halts the merger while the court considers a ruling on a preliminary injunction, which would block the merger for the duration of the litigation. A hearing on the preliminary injunction is set for Aug. 3. Twelve state attorneys general are part of the lawsuit filed last week challenging the unlawful merger, which is expected to result in higher prices and a decline in the variety, quality, and amount of content produced and distributed to consumers.
“The court agreed with the states that this proposed merger puts the public’s interest at risk and raises serious questions about compliance with antitrust law,” Brown said. “We look forward to further proving in court why this anti-competitive scheme will harm consumers and creators.”
The lawsuit is co-led by Brown and the attorney general of California. It was also joined by the attorneys general of Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, and Oregon.
BACKGROUND
For more than a century, Warner Bros. and Paramount have stood astride the film and television industry as independent sources of creativity and competition. The proposed $110 billion merger — the largest in Hollywood history — would combine two of Hollywood’s five major film distributors and two of the five major owners of basic cable channels, extinguishing competition between Paramount and Warner Bros., and inflicting substantial harm on movie theaters, basic cable distributors, and ultimately, audiences nationwide.
The lawsuit alleges that the merger violates Section 7 of the Clayton Act, which holds that mergers that may substantially lessen competition or tend to create a monopoly are illegal. The attorneys general allege that, if Warner Bros. and Paramount are allowed to merge, it would lessen competition in three markets: film distribution, anticipated blockbuster film distribution, and cable TV.
Currently, Paramount and Warner Bros. compete fiercely to create and distribute new, different, and innovative film and television content to American viewers. Movie theaters and TV distributors rely on competition between Paramount and Warner Bros. to incentivize creativity and secure competitive prices and terms for themselves and for audiences. TV distributors negotiate with Paramount, Warner Bros. and other cable channel owners to acquire the rights to distribute that content to subscribers.
Alternatives are essential in these negotiations, as is the leverage that each entertainment company provides to TV distributors and movie theaters. For example, if Paramount insists on onerous financial terms, its negotiating partner can gain leverage by turning to Warner Bros. and vice versa.
Paramount’s proposed acquisition of Warner Bros. will end this competition, threatening viewers with higher prices, the decline of theatrical exhibition of films, and a reduction in the variety, quality, and amount of content distributed.
The judge’s order is available here.
-30-
Washington’s Attorney General serves the people and the state of Washington. As the state’s largest law firm, the Attorney General’s Office provides legal representation to every state agency, board, and commission in Washington. Additionally, the Office serves the people directly by enforcing consumer protection, civil rights, and environmental protection laws. The Office also prosecutes elder abuse, Medicaid fraud, and handles sexually violent predator cases in 38 of Washington’s 39 counties. Visit www.atg.wa.gov to learn more.
Media Contact:
Email: press@atg.wa.gov
Phone: (360) 753-2727
General contacts: Click here
Legal Disclaimer:
EIN Presswire provides this news content "as is" without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the author above.
