The State Attorneys General's Assertions v. The Facts

Fact Sheet

OVERVIEW

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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REALITY CHECK

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 five assertions driving the state AGs' case — and the facts they ignore.

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ASSERTION 1: The merger would harm consumers, workers, and competition.

THE FACTS: Hollywood needs a stronger competitor, not the status quo.

  • 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.

WHAT OTHERS ARE SAYING:

  • 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]

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ASSERTION 2: The merger would reduce competition within theatrical distribution.

THE FACTS: Theaters need more movies, and so does Paramount.

  • 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.

WHAT OTHERS ARE SAYING:

  • 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]

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ASSERTION 3: The merger would give Paramount-WBD too much control over large-budget and blockbuster films and reduce the overall output of such films.

THE FACTS: Blockbusters are earned by audiences, not assigned by regulators, and more and more studios are producing and distributing big-budget films aiming for blockbuster status.

  • 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.
  • 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.  

WHAT THE NUMBERS SAY: ‍

  • 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.[7] Lionsgate also produced and distributed the big-budget franchise Hunger Games which collectively grossed more than $3.3 billion globally.[8]  
  • 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.[9]
  • 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.[10]
  • 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.[11]  
  • Obsession, reportedly made for $750,000 by a first-time director from YouTube, has grossed more than $442 million worldwide.[12]
  • 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.[13]
  • Disney’s Moana, with a reported $250 million budget and considered a “safe bet,” only opened to roughly $43 million domestically.[14]

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ASSERTION 4: The merger would give Paramount-WBD too much power in basic cable.

THE FACTS: Competition has moved well beyond cable.

  • 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.[15]
  • 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.  

WHAT OTHERS ARE SAYING:

  • 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.”[16]

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ASSERTION 5: The merger should be stopped because other regulators missed the competitive harm.

THE FACTS: Dozens of regulators around the world have already reviewed and cleared the merger. The state AGs are the exception.

  • 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.

WHAT OTHERS ARE SAYING:

  • The Australian Competition and Consumer Commission found the transaction “is unlikely to have the effect of substantially lessening competition” in theatrical film distribution.[17]‍
  • 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.”[18]‍
  • 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.”[19]

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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,” Mar. 6, 2026.

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

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

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

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

[9] 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.

[10] 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.  

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

[12] IMDbPro, "Obsession - Box Office Mojo," Box Office Mojo, (last visited July 20, 2026).

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

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

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

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

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

[18] U.S. Department of Justice, Antitrust Division, “Statement of the Department of Justice Antitrust Division on the Closing of Its Investigation of the Merger of Paramount Skydance and Warner Bros.,” June 12, 2026.

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