A Paramount and Warner Bros merger lawsuit filed on Monday, 13 July 2026, has thrown the $110 billion Hollywood deal into doubt, with twelve states asking a federal court to block the takeover outright.
The coalition of twelve states, led by Democratic attorneys general, lodged the challenge in federal court in Sacramento, as reported by the Washington Post.
They argue the merger would stifle competition across theatrical film distribution, big-budget motion picture releases and the licensing of basic cable television channels.
What the states want from the merger lawsuit
The states have requested a temporary restraining order and a preliminary injunction to halt the transaction while the litigation runs its course.
The action lands despite the deal already receiving clearance from the Trump administration Justice Department, setting up a direct clash between state and federal authorities.
The split between the states and federal regulators is unusual. State attorneys general rarely move to unwind a merger their national counterparts have waved through, and the decision signals they see competition harms the Justice Department was willing to overlook when it granted the deal its blessing.
Paramount has vowed to fight. The company called the suit “wrong on both the facts and the law” and insisted the merger “strengthens competition” rather than weakening it.
The studio, now trading as Paramount Skydance, maintains the combination will help it compete against far larger streaming rivals.
Why Hollywood unions oppose the Paramount merger
Resistance is not confined to state capitals. Hollywood labour has lined up against the tie-up, warning it would concentrate too much power over what gets made and who gets hired.
The Writers Guild of America West branded it “one of the worst proposed mergers we’ve seen” in the industry.
At $110 billion, the deal would fuse two of the biggest names in film and television, uniting storied studios, cable networks and streaming platforms under one owner.
Critics say that scale is precisely the problem, handing a single company outsized leverage over cinemas, advertisers and the shows viewers can access.
The lawsuit reopens a fight many assumed was settled. Swisher Post reported earlier this month that the Paramount and Warner Bros. Discovery merger had cleared its final regulatory approval, a milestone the two companies treated as the last major hurdle before closing the record media deal.
A judge will now weigh the request to freeze the deal, with a hearing on the restraining order expected in the coming days.
Until the court rules, the largest studio merger in modern Hollywood sits in limbo, its closing date hostage to an antitrust fight that could stretch for months.
