Writers Guild of America seeks to block Paramount’s buyout of Warner in latest merger challenge

NEW YORK (AP) — The Writers Guild of America became the latest group to challenge Paramount’s $81 billion acquisition of Warner Bros. Discovery on Tuesday, filing a lawsuit that seeks to block the merger on the grounds it would cause “specific harm” to movie and TV writers working across the U.S.

A Paramount-Warner merger “threatens the economic and creative health of the American entertainment industry,” reads Tuesday’s federal complaint, which was filed by both the Writers Guild of America West and Writers Guild of America East (jointly the WGA).

The union argued that the merger would create less competitors and give the larger company “both the incentive and the ability” to lower wages and the number of projects that offer workers employment.

“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,” WGAE President Tom Fontana said in a statement.

A Warner-Paramount tie-up would bring together two of the five last legacy studios in Hollywood. It would also mean putting Warner’s HBO Max, its libraries filled with popular titles like “Harry Potter” and even CNN under the same roof of Paramount-owned CBS, movies like “Top Gun” and the Paramount+ streaming service.

Tuesday’s complaint alleges that the merger violates antitrust law by reducing competition in three markets for writers: writing for episodic TV and streaming series, TV writing deals overall and screenwriting for the biggest theatrical films.

In response, Skydance-owned Paramount maintained that a combined Warner-Paramount would allow the company to “expand opportunities for writers, not shrink them.” It also reiterated pledges to release at least 30 movies a year with a 45-day window exclusive to theaters — and said it would continue to commission from independent production companies while maintaining “two distinct film studios.”

“A stronger Hollywood only means something if it’s stronger for the writers who power it,” the company said in a statement.

The WGA’s complaint arrives a day after 12 states, led by California Attorney General Rob Bonta, filed a lawsuit challenging the deal, alleging that it would “extinguish competition” in Hollywood and lead to fewer choices for moviegoers and cable TV customers nationwide.

The coalition of states called on Warner and Paramount to not close the merger until after a court had time to “fully evaluate” their claims. But they said the companies quickly refused — and late Monday night, the group filed an emergency motion in federal court seeking a temporary restraining order and preliminary injunction aimed at immediately halting the deal.

Paramount on Monday called the states’ claims “wrong on both the facts and the law” and vowed to “vigorously defend” its Warner acquisition.

The growing list of legal challenges could become a roadblock in Paramount’s quest to complete its purchase of Warner. Other regulatory reviews are ongoing in the European Union and in the U.K., which has suggested it may intervene. But Paramount has also racked up effective green lights from a handful of other countries, including the Trump administration in the U.S., China, Canada and Australia.

Paramount and Warner have hoped to close their deal sometime in the third quarter of this year. In Monday night’s motion seeking an immediate pause, the states said the companies may try to complete the process as early as July 22.

Including debt, Paramount’s proposed purchase of Warner is valued at nearly $111 billion based on outstanding shares.