Writers Guild sues to block Paramount deal

LOS ANGELES (KESQ) - The Writers Guild of America today sued to block the proposed merger of Paramount Skydance and Warner Bros. Discovery on the grounds that it violates federal antitrust law and would cause harm to writers.   

The guild's lawsuit, filed jointly by the WGA East and West in the Northern District of California, alleges that Paramount Skydance's pending $110 billion acquisition of Warner Bros. Discovery would reduce opportunities, lower pay and worsen working conditions for writers.

The WGA suit comes a day after California and 11 other states sued to block the proposed takeover.   

The WGA argues that the elimination of a key competitor and the creation of a new dominant firm would result in reduction in the quantity and variety of theatrical films and television series as the merged company would have a greater ability to reduce output.

Furthermore, the complaint asserts that the merger would increase the ability for the few remaining companies to tacitly coordinate to further suppress competition for writers' work.  

"With fewer competitors, the merged Paramount-Warner Bros. entity would have both the incentive and the ability to lower costs by suppressing writers' wages and reducing output,'' according to the complaint. "Writers will be paid less and have fewer employment opportunities."

The WGA complaint focuses on the alleged anticompetitive effects of the merger in three markets for writing services: anticipated top-grossing films, episodic television and streaming series, and overall deals.

"If Paramount succeeds in buying Warner Bros., the merged firm will be the largest buyer of original film and television programming in the United States,'' WGAW President Michele Mulroney said in a statement.   

"This would eliminate competition in an already consolidated industry, threatening the livelihoods of entertainment workers and the creative diversity of TV and film," he said. "We applaud the dozen state attorneys general who have stepped up to enforce our antitrust laws and are proud to file suit alongside them."  

In announcing the states' lawsuit Monday, California Attorney General Bonta argued that the merger, which has already been approved by the U.S. Department of Justice, would lead to higher prices for consumers and a reduction in entertainment content.

Bonta said the merger -- considered one of the biggest media deals in history -- would put one company in charge of nearly one-third of all theatrical motion picture and basic cable programming.