Paramount streaming subscribers sue over WBD merger
Paramount streaming subscribers sue over WBD merger
The class-action lawsuit alleges the deal will lead to decreased competition in streaming, news, and theatrical releases.
Paramount Skydance will have to set aside some funds for its legal team in the coming months. The company is in the midst of a takeover of Warner Bros. Discovery, a deal that has officially won the approval of WBD shareholders. But Paramount is facing yet another challenge to the transaction, this time in the form of a class-action lawsuit brought by the company’s own customers.
Key Details:
- Headed for court: Paramount subscribers have filed a class-action lawsuit over the merger with WBD.
- Reduced competition: The suit alleges that Paramount will have outsized streaming pricing power if the merger finishes.
- Not so: Paramount has issued a statement denying the merits of the suit.
A group of Paramount subscribers filed their lawsuit in California federal court on Thursday. The suit says the deal will violate antitrust laws by reducing streaming competition, lowering the number of theatrical releases from the combined Paramount and WBD, and lessening diversity of viewpoints if CBS and CNN are placed under the same editorial guidelines.
The merger would increase “Paramount’s ability and incentive to raise prices, reduce output, narrow slates, reduce quality, and worsen consumer-facing terms, including through control of distribution, exclusivity, windowing, and licensing,” the lawsuit says.
The complaint dives deeply into the math of the merger, alleging that a post-merger studio would have a larger market share than Disney, Universal, and Sony, and “eliminate Paramount as an independent studio competitor.” Paramount Skydance CEO David Ellison has tried to allay fears regarding the combination of the two studios, but these customers clearly aren’t appeased.
Paramount has already begun fighting the lawsuit in the press and has issued a statement refuting its arguments.
“We are aware of the private action filed today in federal district court and are confident that it is without merit,” it said. “The combination of Paramount and WBD will create a stronger competitor that is well-positioned to serve as a champion for creative talent and consumer choice.”
The Paramount/WBD merger isn’t expected to face significant resistance by federal regulators, but state attorneys general and European regulators may present a stiffer challenge. The deal is also opposed by a long list of Hollywood actors, directors, and producers.
Now, Paramount must battle against antitrust allegations in court. The company still expects to close its acquisition of WBD by the third quarter of 2026, but now faces another obstacle before it can put the deal to bed.
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