Twelve state attorneys general just walked into court to block a merger the DOJ already cleared — and California's holding the pen. Quick catch-up: federal regulators had already signed off on Paramount Skydance's takeover of Warner Bros. Discovery, but the state AGs kept their own antitrust pressure alive. Oregon pulled back a request for a 60-day closing pause — its investigation stayed open — and California's concerns were the clearest sign that state-level scrutiny could still complicate this thing. Now that whole backdrop is a lawsuit. This is Paramount Skydance Watch, and today, the state pressure stops being procedural and starts getting real. Twelve states are in court against a $110 billion deal, and that same afternoon, Zaslav quietly sells $59.5 million in stock. We'll get into what those moves actually mean. Jill McLaughlin, writing in The Epoch Times:
California and 11 other states filed an antitrust lawsuit on July 13 against the Paramount Skydance and Warner Bros. Discovery merger, asking the court to permanently block the $110 billion deal. California Attorney General Rob Bonta claims that the acquisition would extinguish competition, drive up prices, lower content quality, and result in fewer movies and television shows.
The state-AG fight we've been watching all week just went from investigation to filed lawsuit — California and eleven others, asking a court to permanently block the deal on July 13. And here's the part that matters: Bonta's complaint is arguing federal antitrust law, not some state-specific theory. That's interesting, because the DOJ already looked at that market definition and cleared it. Right, and that's the strange part. A state coalition running a federal theory doesn't walk into court with the same deference a DOJ challenge would get — they're going back over ground the federal enforcer already covered. Twelve Democratic AGs, standing under the Hollywood sign, quoting The Godfather at David Ellison. That's a press conference. Whether it survives a motion to dismiss is a very different question. Careful, though — Oregon folded its delay motion last week, and people started writing the state challenge off entirely. The grudge didn't die. It found a bigger vehicle, and Oregon's name is right there on the coalition. Fair. We're past Oregon's procedural stall now; California's AG office brings the most aggressive entertainment antitrust theories in the country. It's a substantive challenge. I still think it closes, but it's the most serious hurdle we've seen. If the DOJ already waved this deal through, what's actually left for twelve state attorneys general to do — are they just making noise, or can they genuinely stop a merger the federal government said was fine? Yeah, and that distinction matters. Short answer: yes, states can try to block a deal on their own even after a federal green light. The backdrop is this: the Justice Department's Antitrust Division signed off on Paramount Skydance's roughly $111 billion bid for Warner Bros. Discovery back on June 12th — POLITICO had that first. But on Monday, a coalition of twelve states led by California Attorney General Rob Bonta filed its own antitrust lawsuit to stop it. Variety's reporting on the complaint says the states allege the deal violates the Clayton Act — the core federal antitrust statute — by lessening competition in three specific markets: wide-release theatrical distribution, what the filing calls 'top-grossing' theatrical distribution, and basic cable licensing. CBS News adds that the states say the merger would hurt not just consumers — through higher cable package and movie ticket prices — but workers in the industry too, with lower pay and fewer job opportunities. That worker-harm theory, plus the narrow market definitions, matters here: state AGs have independent authority under antitrust law to pursue theories the DOJ chose not to, and they can litigate those claims in federal court no matter what the federal government decided. So with those specific markets — theatrical distribution, cable licensing — are the states trying to find a lane the DOJ didn't look at, or are they directly contradicting the federal clearance? From the complaint, at least as Variety reports it, they're doing a bit of both: drawing tighter market boundaries than the DOJ apparently drew, which is a classic way to reach a different legal conclusion on the same transaction. Watch whether the court moves on an expedited schedule, because as long as this lawsuit is active, the deal stays in real legal jeopardy even with the federal sign-off. Deadline, with Dade Hayes:
Warner Bros Discovery CEO David Zaslav is selling about $59.5 million in company stock, his latest move to cash in on the company’s stock rebound. The sale of the nearly 2.2 million shares was revealed in an SEC filing on Monday, hours after 12 states filed an antitrust lawsuit intended to block Paramount’s $110 billion acquisition of WBD.
Here's the timing I can't get past. Twelve states file to block the deal Monday afternoon, and hours later Zaslav's SEC filing lands — he's selling nearly 2.2 million shares, about $59.5 million worth. That's the part I don't want to shrug off. An insider selling into a stock rebound on the same day a multistate antitrust action drops — I'm not saying it's panic, but you don't get to wave it away either. Cassidy, I don't read that as panic. His merger payout could approach $800 million, most of it in stock. Fifty-nine million on a rebound is a rounding error for a guy that deep in the equity. Sure — but read the price he's cashing at. Shares closed Monday at $27.09, still down 6% on the year. If he thought the combined-company ceiling was way north of that, why take chips off the table now, mid-close, with California suing? Got a tip, correction, or story idea for Paramount Skydance Watch? Send it our way at paramountskydancewatch at lantern podcasts dot com. We read the inbox, and your notes help shape what we track next.
You’ll find links to every story we touched on today in the show notes. If one of them caught your ear, that’s the place to dig in a little further.
That’s Paramount Skydance Watch for today. This is a Lantern Podcast.