Paramount Skydance began to lay out its legal argument Thursday against an antitrust lawsuit brought by a dozen states, calling it “one of the weakest merger challenges in modern antitrust history.”
Paramount’s lawyers filed an opposition to the states’ motion for a temporary restraining order, which would pause the $111 billion merger with Warner Bros. Discovery. In it, Paramount argued that the states’ claim that the merger will harm competition is contradicted by the “real-world economics” of the film business.
“Low barriers to expansion by existing competitors — including Universal, Disney, Amazon MGM, Sony, Lionsgate, A24, and NEON — make Plaintiffs’ concentration figures irrelevant and ensure that competition will remain vigorous,” Paramount’s lawyers wrote. “The real-world economics of filmdistribution and the merger’s economic incentives demonstrate that the transaction will increase, notdecrease, theatrical motion picture output and will not adversely affect the price terms to theaters.”
Led by California Attorney General Rob Bonta, a 12-state coalition filed suit on Monday, arguing that the Warner Bros. merger will harm theaters and cable distributors by creating unlawful market concentration. The suit claims that the merged entity will hold 30% of the market for blockbuster film distribution, and that four companies — including Disney, Universal and Sony — will control 93% of that market.
