Paramount’s $110 billion takeover of Warner Bros. Discovery is now facing a direct legal challenge from consumers, marking the first major lawsuit aimed at stopping the deal.
According to The Hollywood Reporter, a group of Paramount subscribers filed a complaint in California federal court seeking to block the merger, arguing it would reduce competition across streaming, film, and television. The lawsuit claims the combined company would have both the ability and incentive to “raise prices, reduce output, narrow slates, reduce quality, and worsen consumer-facing terms.”
The case targets not only Paramount’s acquisition of Warner Bros. Discovery, but also Skydance’s broader role in consolidating control over key media assets. The plaintiffs argue that merging two major studios would reshape the competitive landscape, particularly in theatrical distribution and streaming, where the combined entity would immediately become one of the largest players.
According to the filing, the new company would control a significant portion of the theatrical market and rank among the top streaming platforms by both revenue and subscriber reach. The complaint states that the deal would leave audiences with “fewer theatrical titles” and less variety in genres and budgets, while also limiting consumer choice in streaming and cable.
Paramount pushed back in a statement, calling the lawsuit “without merit.” The company said the merger would create a stronger competitor capable of investing in content and expanding options for audiences. Paramount has consistently framed the deal as necessary to compete with larger tech-driven platforms, including Netflix.
That argument has been central to the company’s position since it entered a bidding war with Netflix earlier this year. Netflix initially agreed to acquire Warner Bros. Discovery’s studio and streaming assets but declined to increase its offer after Paramount raised its bid to $31 per share for the entire company. Netflix ultimately walked away, collecting a $2.8 billion breakup fee.
With Netflix out, Paramount secured approval from Warner Bros. Discovery’s board and later from shareholders, clearing a major hurdle in the deal process. However, the merger has continued to face resistance from multiple directions.
California Attorney General Rob Bonta previously warned that the transaction is “not a done deal,” confirming that an ongoing state investigation is underway. Federal lawmakers have also urged regulators to examine foreign investment tied to the deal, including billions in funding from Middle Eastern sovereign wealth funds.
The subscriber lawsuit adds another layer of scrutiny, focusing specifically on how the merger could affect consumers. It alleges that the transaction would accelerate consolidation in an industry that has already seen major deals over the past decade, including Disney’s acquisition of 21st Century Fox and the merger of WarnerMedia and Discovery.
Regulators at the Justice Department, Federal Communications Commission, and in Europe are still reviewing the transaction. The subscriber lawsuit now joins that process as a potential obstacle to closing.
