Writers Guild Sues to Block Paramount-Warner Bros. Merger

Writers Guild Sues to Block Paramount-Warner Bros. Merger

The Writers Guild of America has filed a federal lawsuit to block the acquisition of Warner Bros. Discovery by Paramount, alleging the deal would violate antitrust laws and devastate the livelihoods of film and television writers. The legal action, filed Tuesday, in the U.S. District Court for the Northern District of California, comes one day after a coalition of 12 state attorneys general filed their own suit to stop the merger.

The union, comprising the Writers Guild of America West and Writers Guild of America East, represents 18,000 members. In its complaint, the WGA argues that the merger would create a single "mega-buyer" of original programming with unprecedented power to suppress wages and reduce the volume of available projects. By combining two of the five remaining legacy studios in Hollywood, the union claims the deal would eliminate the ability of writers to pit studios against one another to secure better bids and deal terms.

"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."

Michele Mulroney, Writers Guild West President, via Hollywood Reporter

The WGA specifically alleges that the merger would reduce competition in three primary markets: screenwriting for major theatrical films, episodic television and streaming series, and overall TV writing deals. The union points to data showing that between 2021 and 2024, Paramount and Warner Bros. Collectively accounted for 38 percent of overall deals and 35 percent of film writing jobs. Between 2022 and 2025, they accounted for 36 percent of television writing projects. The lawsuit asserts that a company with more than 30 percent market share is presumptively anticompetitive based on Supreme Court precedent.

Further complicating the union's view is the financial state of the proposed entity. The WGA claims that the $79 billion in debt the merged company would assume creates a direct incentive for mass layoffs and a reduction in output rather than the growth promised by executives.

Paramount Skydance CEO David Ellison has previously assured the industry that the merged company would release 30 films annually with a 45-day exclusive theatrical window. However, the WGA complaint suggests these claims ignore historical precedent and the basic limitations of an annual release calendar.

"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,"

Tom Fontana, WGAE President, via AP

The WGA compared the situation to the blocked merger of Penguin Random House and Simon & Schuster, where the U.S. Department of Justice argued that a dominant market share would lower advances paid to authors. The union also referenced previous consolidations, such as the Disney-Fox and AT&T-Warner Bros. Deals, which they claim led to thousands of layoffs.

Paramount has vigorously defended the deal, stating that a combined company is necessary to compete with big tech firms and rivals like Netflix and Disney. A company spokesperson asserted that the merger would lead to more development slates and more greenlights for series and films.

"A stronger Hollywood only means something if it’s stronger for the writers who power it,"

Paramount spokesperson, via AP

The merger would consolidate massive intellectual properties and networks under one roof, placing Warner's HBO Max, CNN, and titles like Harry Potter alongside Paramount's CBS, Paramount+ and films such as Top Gun.

The legal landscape is becoming increasingly crowded for Paramount. While the company has received approvals from China, Canada, Australia, and the U.S. Trump administration, it faces ongoing regulatory reviews in the European Union. In the United Kingdom, culture minister Lisa Nandy notified Paramount that her office is minded to intervene, a term indicating likely legal action.

The urgency of the legal battle is heightened by a potential closing date. While Paramount and Warner hoped to close in the third quarter of this year, 12 states led by California Attorney General Rob Bonta warned the companies might attempt to finalize the process as early as July 22. The states have filed an emergency motion for a temporary restraining order and preliminary injunction to prevent this.

Despite the lawsuits, Paramount's outside counsel, Jeffrey Kessler, told CNBC that the company still expects to close the merger by September. He noted that the $111 billion deal—including debt—is pro-competitive and designed to create a stronger theatrical producer and linear television company.

The financial stakes for a delay are significant: Paramount's agreement with Warner Bros. Includes a 25-cent-per-share ticking fee for every quarter the merger remains unclosed after September 30.