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Cinema United and other organizations that opposed Paramount’s attempt at a mega-merger with Warner Bros. have applauded the deal. Discovery reported on the move by 12 state attorneys general on Monday to file a lawsuit to block the $111 billion deal.
Cinema United, the trade organization that advocates for movie theaters across the country and internationally, scored a victory in the challenge to the deal it had strongly opposed, arguing that small businesses across the country would suffer. “The ramifications of further film studio consolidation will be significant and lasting, not just in Hollywood, but on Main Streets across this country where local movie theaters serve as cultural and financial cornerstones for communities of all sizes,” President and CEO Michael O’Leary said in a statement.
United Cinema has long opposed a massive merger of another major Hollywood entity with Warner Bros., claiming that such a deal would concentrate too much power in the hands of one distributor. The group is concerned not only with bargaining power, but also with the variety and number of films that would be released each year if the major distributors merged. (Paramount Skydance CEO Ellison has promised to release at least 30 films in theaters a year through Paramount and Warner Bros. Discovery, which he says will operate as independent studios, if the merger goes through.)
Cinema United’s position is particularly salient given that state regulators, in their lawsuit, argued that the theatrical market, in particular, would be harmed by a decline in the number of owners of large-scale, high-grossing films. They claimed the mega deal would raise prices for consumers, reduce the volume of projects in theaters and stifle the diversity and quality of entertainment.
Besides California, attorneys general in Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington joined the lawsuit filed in federal court in California on Monday.
Equally vocal about the alleged evils of corporate consolidation in the entertainment industry has been the Writers Guild of America, the union that represents film and television writers across the country. The union said Monday that it had “reached out to the offices of several state attorneys general” to argue against the merger for some time.
“This is one of the worst proposed mergers we have seen,” Michelle Mulroney, president of the Writers Guild of America West, said in a statement. “We have been very clear from day one that the combination of Warner Bros. Discovery and Paramount threatens our members and this industry, and must be blocked.”
Her Writers Guild of America East counterpart, Tom Fontana, added, “Paramount Skydance’s proposed merger with Warner Bros. Discovery will create an alarming amount of consolidation and downturn and cause irreparable harm to our members. People will lose their jobs, their incomes and their homes. The damage this deal will do to America’s entertainment and news industries will be an absolute disaster that cannot be mitigated.”
Ahead of Monday’s announcement, the American Economic Liberties Project, a nonprofit dedicated to antitrust policy, helped organize a series of public meetings for industry workers opposed to the Paramount-Warner Brothers deal. Not surprisingly, Alvaro Bedoya, a senior advisor to the American Economic Liberties Project, which moderated these meetings, cheered on the legal challenges.
“The rich people who run Paramount can say what they want, but the people who actually work for them know this will kill jobs and destroy small businesses that are the lifeblood of this industry. I hope the states win and win fast, because these people need them,” the former FTC commissioner said in a statement.
In response to the lawsuit filed Monday, Paramount claimed that the lawsuit would help protect tech giants like Apple and Amazon, as well as the dominant streaming company Netflix, from competition and that the blocked deal would lead to consequences for entertainment industry workers and consumers.
But opponents of the merger are not convinced. New York Mayor Zahran Mamdani intervened in the lawsuit on Monday, posting on the social media platform X that he was “proud” that New York was one of the states participating in the lawsuit. He added: “New York’s workers helped build this industry. They should not be sacrificed for the sake of further corporate consolidation.”
