State AGs finalizing antitrust lawsuit over Paramount–Warner Bros. Discovery merger

By Brian Stelter, CNN

(CNN) — Lawyers for several states are finalizing an antitrust lawsuit challenging Paramount’s pending acquisition of Warner Bros. Discovery, including CNN, according to people involved in the legal process.

The multistate suit will likely be filed next week, the sources told CNN, though the filing date is subject to change.

If the suit is filed, it could disrupt Paramount’s plan to take control of Warner later this summer. The company has been seeking to complete the deal in the coming weeks.

The suit would also represent another instance of state attorneys general intervening in a merger that has already been approved by the federal government.

The Justice Department cleared Paramount’s acquisition of WBD last month amid criticism of the Trump administration’s close ties with the company. Federal clearance doesn’t bar state attorneys from bringing their own antitrust claims.

Critics who have urged state attorneys general to sue have argued that the deal would harm competition across the entertainment and news industries, a charge Paramount has denied.

State-level officials have been probing Paramount’s lobbying of the Trump administration, among other matters, the sources said.

In response to questions about a likely lawsuit by a coalition of states, a Paramount spokesperson said, “We continue to engage constructively with regulators, including State Attorneys General, and are prepared to address any legitimate antitrust issues. We are confident this transaction raises no such concerns.”

Paramount is also facing regulatory hurdles in the United Kingdom, where culture minister Lisa Nandy recently said she was “minded to intervene” in the deal.

In the United States, a coalition of state attorneys general has been investigating the deal for months, and California Attorney General Rob Bonta has repeatedly expressed concerns about the proposed combination.

Asked for comment on Wednesday afternoon, Bonta’s office said, “The Paramount acquisition of Warner Bros. remains an active investigation, and we do not have any update to share at this time.”

Reuters reported the timing of the potential lawsuit earlier on Wednesday.

Most of the legal machinations between Paramount and the states have occurred out of public view, but the office of Oregon Attorney General Dan Rayfield was in court on Wednesday to seek enforcement of a subpoena related to the state’s review of the deal.

The hearing was delayed until Monday. Paramount representatives informed the court that it would not complete the merger before July 22.

The Oregon AG’s office wants the court to order a 60-day pause before Paramount can take control of WBD. But any such order might be superseded by the multi-state lawsuit.

A coalition of state attorneys general succeeded in stalling Nexstar’s takeover of a rival TV station, Tegna, earlier this year. A judge froze that deal ahead of an expected trial, and Nexstar is now appealing.

Paramount’s statement on Wednesday noted that regulators in numerous countries have already blessed the WBD deal.

“Antitrust authorities around the world have carefully reviewed this transaction, clearing it or concluding that it does not violate any competition laws,” a spokesperson told CNN. “That regulatory record underscores what the facts, the law and the economics make clear: this transaction will create a stronger challenger to dominant global streaming and technology platforms, expand consumer choice, increase investment in premium content and theatrical distribution, and create more opportunities for creators and workers.”

“We are confident the facts and the law support this transaction, and we will continue to defend it vigorously,” Paramount added.

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