Paramount hit back at an antitrust lawsuit filed Monday by12 states seeking to block the company’s pending $110 billion acquisition of Warner Bros. Discovery.
The suit “reflects a fundamentally flawed application of the antitrust laws and is wrong on both the facts and the law,” a Paramount spokesperson said in a statement. “We will vigorously defend the transaction and demonstrate that this challenge is inconsistent with sound competition policy and the competitive realities of the media marketplace. Delaying this transaction will only harm entertainment workers who have already suffered over recent years as technology has disrupted their livelihood and cost California tens of thousands of entertainment jobs.”
The Paramount response, via a two-page press release, followed the filing of the lawsuit, which contends that the merger will create an anticompetitive entity controlling too much of the pay-TV and movie studio sectors. As a result, the suit alleges, customers will be harmed by having fewer choices and higher prices.
Paramount reiterated its longstanding view that the deal is pro-Hollywood and pro-consumer. In a move that is notable given that the company outmuscled Netflix in a multi-party bidding war for WBD earlier this year, the statement cites Netflix twice as an example of the tech companies that have “come to dominate” the entertainment industry.
“The combination of Paramount and WBD will create a stronger, well-capitalized, creative-first media company that is better positioned to compete with companies like Netflix that have come to dominate the industry for audiences, premium content, and creative talent. Put simply, any attempt to block thistrans action undermines the very principles antitrust law is designed to promote: more competition, more choice for consumers, and more opportunities for creators and workers,” the spokesperson added.
“The practical effect of this lawsuit is to shield those dominant streaming platforms like Netflix and technology companies from much needed competition while preventing the significant benefits this transaction will deliver for consumers, creators, workers, and the broader Hollywood economy. We will continue to fight against any attempt to derail a deal that strengthens competition, expands opportunity, and positions the combined company to compete in an increasingly competitive global media landscape.”
The action by the AGs comes as UK and European Union regulators are in the final stages of their reviews. Paramount has promised to pay a “ticking fee” if the deal does not close by September 30.
Paramount, in its statement, pointed to approvals granted by a range of global agencies.
“The careful review undertaken by these regulators and their uniform decision to clear the transaction or
allow it to proceed contrasts sharply with the approach taken by the state attorneys general in this case,” the company said. “We will fight any effort to block a merger that has clear benefits for consumers, creators, and the wider entertainment industry, and where the alternative is to entrench a failing status quo.”
