A new challenge has emerged against Paramount Skydance’s planned $111 billion purchase of Warner Bros. Discovery, with the Writers Guild of America West and Writers Guild of America East filing a lawsuit to block it.
Filed Tuesday in the U.S. District Court for the Northern District of California, the complaint alleges the merger violates U.S. antitrust law and would negatively affect writers.
According to the guilds, combining the two studios would eliminate a key competitor, giving the newly merged company greater leverage to cut costs by reducing writers’ pay, limiting job opportunities, worsening working conditions, and producing fewer content. The complaint also argues the deal would make it easier for the remaining studios to tacitly coordinate, further reducing competition for writers’ work.
The unions said they have opposed the merger since it was first announced, lobbying lawmakers and regulators, submitting comments to government agencies, and working alongside arts and democracy organizations to raise concerns about its potential impact.
WGA West President Michele Mulroney said the acquisition would create the nation’s largest purchaser of original film and television programming, further concentrating power in an industry that has already undergone significant consolidation.
“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,” Mulroney said. “This would eliminate competition in an already consolidated industry, threatening the livelihoods of entertainment workers and the creative diversity of TV and film.”
WGA East President Tom Fontana said the organization intends to continue fighting the proposal, arguing it would give the combined company unprecedented influence over employment for television and film writers.
“This proposed combined entity would be the largest employer of writers, with tremendous power to suppress our wages, eliminate opportunities for emerging writers, cut jobs across the industry, and produce less programming, effecting the range of storytelling,” Fontana said. “This merger is not inevitable and we are fighting to stop it.”
The guilds’ lawsuit follows a separate legal challenge filed one day earlier by attorneys general from 12 states. That complaint argues the acquisition would reduce competition in the theatrical and basic cable television markets.
Paramount has rejected those claims. In response to the states’ lawsuit, a company spokesperson said the legal challenge “undermines the very principles antitrust law is designed to promote,” maintaining that the transaction would strengthen competition, provide consumers with more choices, and create additional opportunities for employees.
The states, however, contend that combining Paramount and Warner Bros. Discovery would have the opposite effect by reducing competition between two major entertainment companies, ultimately leading to fewer choices, higher prices, and lower-quality content.
Featured image: Ethan Swope/Bloomberg/Getty Images
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