The State Attorneys General's Assertions v. The Facts

Twelve state attorneys general (AGs), led by California Attorney General Rob Bonta, who is currently running for re-election, have sued to block the proposed Paramount–Warner Bros. Discovery (WBD) merger. They argue the deal would reduce competition and hurt theaters and basic cable distributors. But the lawsuit ignores the vibrant competition occurring every day to bring moviegoers to theaters and to earn viewers at home.

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The state AGs’ focus does not represent how people actually consume entertainment today. Audiences now have a variety of ways to access entertainment—choosing from streaming, YouTube, social video, gaming, live sports, independent films, creator content, and traditional TV. In this highly competitive environment, content is critical. This merger will allow Paramount and WBD to bring more high-quality content to consumers, whether they be in theaters or at home, and more effectively compete with the leading streaming services, including Netflix, Amazon, and Disney.

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Here are the six assertions driving the state AGs’ case — and the facts they ignore.

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• Hollywood is already competing against Netflix, Amazon, Apple, YouTube, and other global platforms with huge audiences, deep pockets, and direct relationships with viewers.
• The state AGs don’t claim the merger would reduce competition for streaming or any service sold directly to consumers, and they also don’t claim it would reduce competition for hiring workers in any labor market. The state AGs’ theories are about distribution to theater chains and cable distributors—big businesses with lots of leverage over studios.
• If Hollywood is going to compete with the world's largest streaming platforms, its studios need the scale to succeed. Blocking this merger would leave two sub-scale competitors without the content or resources they need to take on the leading global streamers. By contrast, this merger would create a stronger company with greater capacity to invest in movies, television, and the creative workforce—strengthening Hollywood and providing consumers and the creative community with a meaningful competitor.

• Former Connecticut Attorney General George Jepsen wrote that “American consumers and families need more competition in streaming, not less. Based on the evidence, this merger delivers it, and the law supports letting it move forward.”^[1]
• Former California Attorney General Bill Lockyer wrote that combining Paramount+ and HBO Max “would result in a stronger competitor in the global marketplace with the ability to meaningfully invest in film and TV production and distribution for decades to come.”^[2]
• Stephen Moore, former senior economic advisor to President Trump, and Robert Wolf, former senior economic advisor to President Obama, wrote “The Bureau of Labor Statistics reported that motion picture and video production shed 49,000 jobs over the decade ending in February 2026, a 21% decline. A merger alone cannot reverse that trend, but increased investment and production could support a more durable pipeline of work.”^[3]

• Theaters need studios to make, market, and release films people want to see on the big screen. That matters when movie ticket sales in the U.S. and Canada have fallen from 1.6 billion tickets in 2002 to 769 million in 2025.^[4]
• Paramount has every incentive to make more movies, not fewer. Just like theaters want a regular flow of new movies to keep the audience coming, Paramount has the same need and business incentives to keep new movies flowing. Releasing movies in theaters also drives excitement and increases the value of those movies when they later come to streaming.
• The synergies from the merger will help Paramount and WBD invest in theatrical releases at a time when theaters need a stronger film pipeline. Paramount’s commitment to release at least 30 films theatrically each year, with every film receiving a minimum 45-day theatrical window, reinforces that strategy.
• It makes sense for Paramount to make these commitments; it will never be able to compete with its larger streaming competitors unless it invests in more content.

• AMC CEO Adam Aron said he has a “favorable view” of Paramount’s bid for WBD, noting that Paramount has already been “increasing the number of movies being greenlit.”^[5]
• Cinemark CEO Sean Gamble said Paramount and WBD are “longstanding supporters of theatrical exhibition,” and that their commitment to theatrical releases is “very encouraging.”^[6]

• The state AGs’ reliance on out-of-date market share data to allege that Paramount and WBD combined would have 27% and 30% market share in wide release and “tentpole” films respectively, fails to account for the explosive growth of competitors like Amazon MGM, Lionsgate and A24. And it ignores the dynamism and fluidity of today’s marketplace.
• Even under the State AGs’ flawed view of the market, Paramount and WBD’s combined box office shares for the last 12 months is just 18% for all wide release films. Extending that period back for the last 24 months, Paramount and WBD’s combined box office shares are below 22% for all wide release films.^[7]
• During this same time, Amazon MGM has been investing at the scale of a major studio, having publicly committed to releasing at least 15 theatrical films annually while developing several major theatrical franchises, including James Bond and Masters of the Universe.^[8]
• Lionsgate, which has described itself as the largest independent motion picture company in the world, has generated nearly $15 billion in global box office to date, regularly distributes 10-15 wide release theatrical films annually, and is the home to multiple major film franchises, including John Wick, The Hunger Games, and Twilight.^[9]
• In 2025, A24 ranked as the eighth-largest domestic theatrical distributor, having released 17 theatrical films—nine ahead of Paramount.^[10]

• In finding that “at film production level, enough film studios remain as competitors in the EEA”, the European Commission correctly defined the market as including “smaller US studios such as Amazon MGM, A24 and Lionsgate, as well as European studios” in addition to “other major US studios like Disney, NBC Universal and Sony.”^[11]

• The lawsuit treats big-budget movies and blockbusters like a protected category controlled by only a handful of studios. The market reality tells a different story.
  • Now more than ever, hits can come from newer studios, independent producers, first-time directors, or entirely unexpected places.
  • Studios other than the so-called “legacy” studios are investing in big-budget theatrical films and achieving wide success, including Amazon MGM, Lionsgate, A24, and even Netflix.
  • In finding there was sufficient competition at the film production level, the European Commission rejected that big-budget or blockbuster films constituted a relevant market. Instead, it found the market will remain competitive for these types of films too.^[12]
• Theaters will embrace potential hits from any studio large or small. Studios and theaters negotiate over which films are screened in which theaters, film-by-film, week-by-week based on what audiences are paying to see. No matter how big or successful a studio has traditionally been, if a movie does not perform, theaters will switch their screens to the movies that connect with moviegoers. Theaters are capable of negotiating with non-“legacy” studios that have invested in big-budget films aiming to become blockbusters.
• Today, smaller films can become cultural moments, independent studios release blockbusters, and expensive studio bets can fall short.
• A blockbuster is not something regulators can define in advance. It is something audiences decide by showing up.
• The fact that so many studios are investing and succeeding in big-budget and blockbuster films demonstrates that any supposed reduction in competition from the merger will have no negative impact on overall output of such films.

• Michael, distributed by Lionsgate, a studio the lawsuit doesn’t consider to be a competitor, reportedly became the first biopic to cross $1 billion worldwide.^[13] Lionsgate also produced and distributed the big-budget franchise Hunger Games which collectively grossed more than $3.3 billion globally.^[14]
• Project Hail Mary, a big-budget film which cost approximately $200 million, earned approximately $80.5 million in ticket sales its first weekend, a record opening for Amazon MGM.^[15]
• Elden Ring is being produced with a budget over $100 million, making this live-action adaptation of the video game A24’s most ambitious project to date.^[16]
• Narnia: The Magician’s Nephew, will be released by Netflix in theaters worldwide on February 12, 2027 before coming to the streaming platform in April 2027.^[17]
• Obsession, reportedly made for $750,000 by a first-time director from YouTube, has grossed more than $442 million worldwide.^[18]
• Backrooms, reportedly made for $10 million also by a first-time director who got his start on YouTube, crossed $100 million in six days – A24’s biggest opening ever.^[19]
• Disney’s Moana, with a reported $250 million budget and considered a “safe bet,” only opened to roughly $43 million domestically.^[20]

• The lawsuit focuses on basic cable, but most people now watch TV across a much bigger mix of options. Streaming accounts for 47.5% of U.S. TV viewing. YouTube alone amounts to 12.7%. And cable is 20.2%, down from 39.5% in 2021.^[21]
• In this highly competitive environment, raising prices on cable is self-defeating because it simply drives more subscribers to cut the cord and choose alternative options. But the state AGs simply ignore this significant competitive constraint.
• For cable, combining Paramount’s and WBD’s complementary channel lineups does not create more bargaining power. Cable distributors almost universally license both companies’ channels already—they don’t substitute one for the other. For example, Cartoon Network and MTV serve different audiences and programming needs. Combining those kinds of complementary assets can create efficiencies that support increased investment in programming and quality.
• Even accepting the state AGs’ flawed claims at face value and even excluding YouTube, Paramount and WBD’s combined share of total TV viewership across broadcast, cable, and streaming, falls below 20%—well under any threshold that would raise competitive concerns about the transaction.^[22]

• Moore and Wolf write that consumers “no longer depend on a handful of television networks or cable channels for entertainment,” adding that “we’ve also come a long way from when most Americans got their news each night from Walter Cronkite.”^[23]
• The European Commission recognized “enough alternative competitors remain to exert sufficient competitive pressure” on a merged Paramount-WBD with respect to the AV value chain, considering streaming platforms as competing directly with linear TV.^[24]

• The merger has already been reviewed by more than a dozen competition authorities around the world, including in the U.S., and those regulators have concluded the deal poses no threat to competition and allowed it to proceed.
• That record matters. Different regulators, different markets, and different legal systems have looked at the same merger and reached the same basic conclusion: the deal simply does not pose the kind of competitive threat the state AGs are alleging.
• A state lawsuit does not erase that global review. It stands apart from it.

• The European Commission found:
  • “at film production level, enough film studios remain as competitors in the EEA,” correctly defining the market as including “smaller US studios such as Amazon MGM, A24 and Lionsgate, as well as European studios” in addition to “other major US studios like Disney, NBC Universal and Sony”; and
  • “as regards the AV value chain … enough alternative competitors remain to exert sufficient competitive pressure on the merged entity in the EEA,” considering streaming platforms as competing directly with linear TV.^[25]
• The Australian Competition and Consumer Commission found the transaction “is unlikely to have the effect of substantially lessening competition” in theatrical film distribution.^[26]
• The U.S. Department of Justice said its review showed “the impact of the transaction will be to increase competition across the media and entertainment ecosystem, with benefits for American consumers and workers.”^[27]
• On the Department of Justice’s investigation, Moore and Wolf write that, “the Justice Department conducted an eight-month investigation, reviewing more than two million documents from more than 80 custodians. It concluded that the transaction was not likely to harm competition, American consumers or workers in streaming video on demand, linear television or theatrical film development, production and distribution.”^[28]

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^[1] George Jepsen, “Former Connecticut Attorney General George Jepsen: Paramount-WBD Could Strengthen Hollywood Against Big Tech,” TheWrap, June 19, 2026.

^[2] Bill Lockyer, “Paramount-Warner Bros. Should Be Reviewed — Not Automatically Resisted,” The Hollywood Reporter, June 1, 2026.

^[3] Stephen Moore and Robert Wolf, “Ex-Obama and Trump Advisors Agree: Paramount-WBD Merger is Good for Hollywood,” TheWrap, July 15, 2026.

^[4] Pew Research Center, As the Academy Awards approach, a look at moviegoing habits in the United States, March 6, 2026.

^[5] Brent Lang, “AMC Theatres Boss Supports Paramount Deal to Buy Warner Bros.,” Variety, April 16, 2026.

^[6] Etan Vlessing, “Cinemark CEO Is Glad Paramount Won Warner Bros.,” The Hollywood Reporter, March 3, 2026.

^[7] Box Office Mojo, https://www.boxofficemojo.com/year/.

^[8] Tyler Greenawalt, “Amazon MGM Studios unveils its ambitious theatrical slate for 2026 and beyond at CinemaCon,” Amazon News, April 15, 2026; Daniel Roberts, “Amazon MGM’s ‘James Bond’ Reboot Could Make Franchise History With Multiple Actors Playing 007,” Inside the Magic, July 15, 2026.

^[9] Lionsgate, Lionsgate: A Global Entertainment Leader.

^[10] Statista, Ranking of movie studios in the United States in 2025, by domestic market share of ticket sales,

^[11] European Commission, Commission approves Paramount’s acquisition of Warner, subject to conditions, July 21, 2026.

^[12] Paramount Press Release, European Commission Approves Paramount Skydance Corporation Acquisition of Warner Bros. Discovery Marking Major Milestone Towards Completion, July 22, 2026.

^[13] Rachel Raposas, “’Michael,’ Already the Highest-Grossing Biopic of All Time, Crosses the $1B Mark at the Box Office,” People, July 13, 2026.

^[14] Rebecca Rubin, “New ‘Hunger Games’ Prequel Movie, Based on Suzanne Collins’ Next Novel, Set for 2026,” Variety Australia, June 7, 2024.

^[15] Lindsey Bahr, “Box Office: ‘Project Hail Mary’ Blasts Off With $80.5 Million, a Best for Amazon MGM, and the Year,” AP, March 22, 2026.

^[16] Borys Kit, “‘Elden Ring’ Live-Action Movie Adds Tom Burke, Havana Rose Liu, Sonoya Mizuno, Emma Laird as Production Begins,” The Hollywood Reporter, April 20, 2026.

^[17] Adam Chitwood, “Sony Pictures to Distribute Greta Gerwig and Netflix’s ‘Narnia’ Internationally in Theaters,” TheWrap, June 16, 2026.

^[18] Box Office Mojo by IMDbPro, https://www.boxofficemojo.com/release/rl1660846081/.

^[19] Rebecca Rubin, “‘Backrooms’ Crosses $100 Million in 6 Days to Become A24’s Biggest Movie at Domestic Box Office,” Variety, June 3, 2026.

^[20] Janet H. Cho, “Disney’s Live-Action ‘Moana’ Struggles Compared With Animated Original,” Barron’s, July 13, 2026.

^[21] Nielsen, “Streaming Shatters Multiple Records in December 2025 with 47.5% of TV Viewing, according to Nielsen’s The Gauge,” January 20, 2026.

^[22] Nielsen, April 2026 Gauge Report, https://www.nielsen.com/data-center/the-gauge/.

^[23] Stephen Moore and Robert Wolf, More Competition, More Consumer Benefits, and More Jobs: Why the Paramount-Warner Bros. Merger Deserves Approval, July 2026.

^[24] European Commission, Commission approves Paramount’s acquisition of Warner, subject to conditions, July 21, 2026.

^[25] European Commission, Commission approves Paramount’s acquisition of Warner, subject to conditions, July 21, 2026.

^[27] Australian Competition and Consumer Commission, Paramount Skydance / Warner Bros. Discovery — Phase 1 Determination, June 9, 2026.

^[28] Stephen Moore and Robert Wolf, “Ex-Obama and Trump Advisors Agree: Paramount-WBD Merger is Good for Hollywood,” TheWrap, July 15, 2026.

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