NJ Joins Fight To Stop Merger Between 2 Moviemaking Giants

New Jersey has joined the legal battle to stop a controversial corporate merger between two of the largest entertainment companies in the nation: Paramount and Warner Bros.

Earlier this week, the attorney general’s office announced that New Jersey has signed on to a multi-state lawsuit challenging the $110 billion acquisition of Warner Bros. Discovery Inc. by Paramount Skydance Corporation.

The merger would combine two of Hollywood’s five major film distributors and two of the five major basic cable companies. The new company would control roughly one-third of theatrical motion pictures and nearly one-third of basic cable programming across the United States.

In addition to New Jersey, other states that have joined the lawsuit include California, Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Mexico, New York, Oregon and Washington.

It’s not just a Hollywood issue, New Jersey officials said.

Attorney General Jennifer Davenport said New Jersey – the “birthplace of the American film industry” – has become a burgeoning hub for film and television production.

“Given our state’s leadership in the film and television industry, we must protect our residents when corporate media monopolies threaten to upend the industry by raising prices and reducing content choices,” Davenport said.

“The proposed merger between Paramount and Warner Bros. Discovery will hurt our state’s residents – plain and simple,” Davenport claimed.

Eight years ago, New Jersey revived its tax break program for film production companies, which has sparked a resurgence of revenue-generating activity across the state – although some critics have discredited it as a “huge corporate giveaway.”

Major film production studios currently in development in New Jersey include Lionsgate Newark, a $125 million movie and television production facility that is expected to open in 2027, and Netflix’s upcoming East Coast filming headquarters in Monmouth County.

On the flip side of the coin, the U.S. Justice Department’s antitrust division has reviewed the proposal, finding that it is “not likely to result in harm to competition or American consumers.”

According to the Justice Department, the merger isn’t likely to harm streaming video on demand services like Netflix, “linear” television such as cable or satellite, theatrical releases or creative labor.

“The extensive investigatory record reviewed by the division suggests that the impact of the transaction will be to increase competition across the media and entertainment ecosystem, with benefits for American consumers and workers,” the Justice Department reported in June.

A Paramount spokesperson praised the Justice Department’s decision, saying the merger would create a “stronger company better positioned to compete against dominant technology platforms.”

Critics continue to insist that the deal is bad for American consumers, however.

According to the attorney general lawsuit, here are some of the ways that the merger would lessen competition:

• Wide Release Theatrical Film Distribution – Warner Bros. and Paramount are two of the five major film distributors and would combine for an around 27% share of the market. After the merger, only three distributors will control 75% of these films, and only four distributors (Defendants, Disney, Universal, and Sony) will control 86% of them.
• Anticipated Top-Grossing Theatrical Film Distribution – After the merger, the companies will control more than 30% of these films, a submarket of theatrical film distribution focused on anticipated blockbuster films with wide audiences and large production budgets. Four distributors (Defendants, Disney, Universal, and Sony) will control more than 90% of them.
• Licensing Basic Cable Television Channels – Warner Bros. is the second-largest and Paramount is the third-largest in the market for distributing basic cable channels to cable and satellite providers. They would combine for a 27% share.

U.S. Sen. Cory Booker of New Jersey has also criticized the proposed merger, urging the Federal Communications Commission (FCC) to block any “premature closing” and conduct a full national security review.

Booker – a member of the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights – recently penned a letter to the FCC about the merger with two other senators: Elizabeth Warren of Massachusetts and Adam Schiff of California.

The senators claimed that the deal’s newly disclosed financing – showing “nearly 49.5 percent foreign ownership” – poses serious national security and foreign‑policy risks. They said the investment includes Gulf Sovereign Wealth Funds and other foreign entities with “documented histories of censorship and political influence.”

“The commission has an obligation to honestly answer a fundamental question: whether placing 49.5 percent of the equity in the parent company of CBS, CNN, and 28 broadcast television stations into the hands of three foreign governments serves the American public,” the senators wrote.

In addition to the multi-state attorney general lawsuit, the merger has also been challenged by the Writers Guild of America.

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