Bros

A group of five consumers have filed a lawsuit against Paramount Skydance seeking to block its acquisition of Warner Bros. Discovery and unwind the earlier merger that joined the storied Melrose Avenue studio with David Ellison’s Skydance Media, alleging that both deals reduce marketplace competition.

The lawsuit, filed Thursday in U.S. District Court in the Northern District of California, alleges the Paramount-Warner deal will lead to increased prices, fewer consumer choices and reduce production of film and TV since a major rival in the entertainment business will be eliminated.

The suit also alleges that the Paramount-Skydance merger, which was finalized last year, led to higher prices for the Paramount+ streaming service.

The plaintiffs — Pamela Faust, Len Marazzo, Lisa McCarthy, Deborah Rubinsohn and Gary Talewsky — are either Paramount+ subscribers, pay for cable bundles that include Paramount-owned TV channels or are moviegoers who watch films in theaters.

The deal activity for Paramount is part of a growing list of recent media mergers, including Walt Disney Co.’s 2019 acquisition of much of 21st Century Fox and Amazon’s purchase of MGM in 2021.

“These acquisitions show an industry moving by successive combinations toward fewer independent rivals, exactly the consolidation backdrop that heightens the competitive threat posed by the next merger, even if the combined firm remains smaller than the largest platforms,” the lawsuit states.

Paramount is aware of the lawsuit and “confident that it is without merit,” a company spokesperson said.

“The combination of Paramount and [Warner Bros. Discovery] will create a stronger competitor that is well positioned to serve as a champion for creative talent and consumer choice,” the spokesperson said in a statement.

The Paramount-Warner deal is currently winding its way through regulatory approvals. While that process is underway, Paramount has asked the Federal Communications Commission for permission to exceed a cap on foreign ownership for U.S. media companies.

Paramount expects to receive $24 billion in funds from three Middle Eastern royal families, who will become part owners of the combined company. Those total funds will represent about 49% of equity in that new company, exceeding the current foreign ownership cap of 25%.

Paramount has said the Ellison family and RedBird Capital Partners “collectively hold the largest equity stake in the combined company and continue to be the sole owners of Class A Common Stock, representing 100% of the voting shares.”

But on Friday, Rep. Sam Liccardo (D- San Jose) urged the FCC to deny Paramount’s petition on the foreign ownership aspect of the deal.

“Congress did not entrust the public airwaves to this agency so that it could auction off America to Riyadh, Abu Dhabi and Doha,” he wrote in a statement. “This will not stand.”

Paramount Skydance’s proposed takeover of Warner Bros. Discovery cleared a major hurdle Thursday as Warner stockholders overwhelmingly embraced the $111-billion deal.

Approval was expected. Paramount Chairman David Ellison’s proposal would pay Warner investors $31 a share — four times the price of the company’s stock a year ago. Warner Bros. officials did not disclose the precise vote count during the nine-minute special shareholder meeting beyond saying the merger “received sufficient votes and has overwhelmingly passed.”

Paramount offered the generous premium to compete with, and ultimately triumph over, Netflix, which withdrew from the auction in late February after Ellison’s father, Oracle billionaire Larry Ellison, agreed to guarantee the financing of his son’s deal.

The merger would create a new Hollywood behemoth by giving Paramount, which owns CBS and the Melrose Avenue film studio, such valuable assets as HBO, HBO Max, CNN, TBS, Food Network and Warner Bros.’ film and television studios in Burbank. Warner controls beloved TV shows, franchises and movies, including “Casablanca,” Harry Potter, D.C. Comics, “Game of Thrones,” “Euphoria,” “The Pitt,” and “Rooster.”

“Shareholder approval marks another important milestone towards completing our acquisition of Warner Bros. Discovery, building on our successful equity and debt syndications and progress across regulatory approvals,” Paramount said Thursday in a statement. “We look forward to closing the transaction in the coming months and realizing the creation of a next-generation media and entertainment company that better serves both the creative community and consumers.”

Paramount now must secure regulatory approvals in the U.S. and abroad. Ellison, who is poised to honor President Trump with a dinner Thursday evening in Washington, hopes to complete the deal by late summer.

Shareholders, however, made known their disdain for Warner Chief Executive David Zaslav’s proposed golden parachute, which could swell to $887 million, depending on when the transaction closes. His cash, stock and options would be valued at more than $550 million. Warner board members also agreed to pay his tax bill, which could approach $330 million, should the merger be completed by year’s end.

Shareholders, in a non-binding vote, voted against Zaslav’s package.

Paramount’s deal has encountered significant opposition in Hollywood and beyond.

More than 4,000 filmmakers, actors and industry workers, including Ben Stiller, Bryan Cranston, Ted Danson, J.J. Abrams and Kristen Stewart have signed an open letter asking California Atty. Gen. Rob Bonta and other regulators to block the deal.

Opponents fear the consolidation would be lead to massive layoffs and diminish the quality of programming that Warner Bros., CNN and HBO are known for. Hollywood has sustained thousands of layoffs over the last six years; the film production economy hasn’t recovered from shutdowns during the 2023 labor strikes.

“This is already an incredibly consolidated industry where writers have seen merger after merger leave fewer and fewer companies in control of what our members can get paid to write,” Michele Mulroney, president of the Writers Guild of America West, said Wednesday during a press briefing organized by Free Press and other progressive groups that oppose the merger.

“A combined Warner Bros. and Paramount would create a media behemoth with tremendous leverage to reduce content, to raise prices, to increase control of production, to suppress member compensation, worsen working conditions and silence the voices of our members,” Mulroney said.

Trump has long agitated for changes at CNN, and few expect his Justice Department to block the transaction. Defense Department Secretary Pete Hegseth echoed the sentiment. “The sooner David Ellison takes over that network the better,” Hegseth told reporters in March.

It’s unclear whether Bonta or other state attorney generals will file a lawsuit to try to stop the deal. Bonta previously told The Times that his office is reviewing the consolidation.

“This deal can get blocked. I personally think it will get blocked — or undone,” Alvaro Bedoya, former Federal Trade Commission member who now serves as a senior adviser to the American Economic Liberties Project, told reporters Wednesday. He pointed to other proposed mergers that unraveled due to fierce opposition, including the proposed combinations of grocery giants Kroger and Albertson’s.

David Ellison has promised to keep HBO entact and the Paramount and Warner Bros. movie studios humming. He promised cinema owners last week that a combined Paramount-Warner Bros. would release 30 movies into theaters each year.

“This transaction uniquely brings together complementary strengths to create a company that can greenlight more projects, back bold ideas, support talent across multiple stages of their careers,” Paramount said in a statement to push back on the opposition. The company would have the power to “bring stories to audiences at a truly global scale — while strengthening competition by ensuring multiple scaled players are investing in creative talent.”

To finance the Warner takeover, Ellison’s billionaire father, Larry Ellison, has agreed to guarantee the $45.7 billion in equity needed. Bank of America, Citibank and Apollo Global have agreed to provide Paramount with more than $54 billion in debt financing.

Paramount has enlisted a former Trump administration official, lawyer Makan Delrahim, who served as Trump’s antitrust chief during the president’s first term.

In a confident move, Delrahim filed to win the Justice Department’s blessing in December — even though Paramount didn’t have an agreement with Warner Bros. Discovery’s board at the time. In February, a key deadline for the Justice Department to raise issues with Paramount’s proposed Warner takeover passed without comment from the Trump regulators.

The company’s stock plunged about 8 percent on the news of Hastings’s departure.

Netflix Chairman Reed Hastings is leaving the streaming service he cofounded 29 years ago as the company regains its footing after it lost its $72bn deal for Warner Bros Discovery to Paramount Skydance.

In a letter to investors released on Thursday, Netflix said Hastings will not stand for re-election at its annual meeting in June and plans to focus on philanthropy and other pursuits.

The company’s stock plunged about 8 percent on the news of Hastings’s departure. The cofounder is credited with helping to revolutionise how movies and television shows are delivered in homes, upending Hollywood’s business model.

“Netflix is growing revenues double-digits, expanding margins in 2026 and gushing free cash flow,” said LightShed Partners media analyst Richard Greenfield. “While the Q1 was uneventful financially, the departure of Reed Hastings has spooked investors.”

Netflix reaffirmed in a 14-page shareholder letter that its mission remains “ambitious and unchanged” – to entertain the world, providing movies and series for many tastes, cultures and languages. The company’s full-year outlook remained unchanged.

The company did not say how it plans to spend the $2.8bn termination fee it received after losing the Warner Bros movie studio and HBO, and lifted its earnings per share to $1.23 in the first quarter compared with 66 cents per share in the same quarter last year.

Revenue rose to $12.25bn, an increase of 16 percent from the year-ago period, modestly exceeding analyst forecasts of $12.18bn.

Netflix, which long told investors that a Warner Bros acquisition was a “nice to have, not need to have” proposition, highlighted areas of future growth.

The company said its investment in expanding its entertainment offerings, with video podcasts and live entertainment – such as the World Baseball Classic in Japan – is driving engagement.

It plans to use technology to improve the user experience and improve monetisation, as advertising revenue remains on track to reach $3bn in 2026 – a twofold increase from a year ago.

A constellation of stars are lining up against Paramount’s proposed takeover of Warner Bros. Discovery, expressing fears the blockbuster merger would devastate the industry and shrink production jobs.

The letter was signed by nearly 1,000 artists and movie creators, including such big names as Ben Stiller, Bryan Cranston, Noah Wyle, Joaquin Phoenix, Kristen Stewart and Jane Fonda, whose group the Committee for the First Amendment, helped organize the campaign.

“This transaction would further consolidate an already concentrated media landscape, reducing competition at a moment when our industries—and the audiences we serve—can least afford it,” according to the letter. “The result will be fewer opportunities for creators, fewer jobs across the production ecosystem, higher costs, and less choice for audiences in the United States and around the world.”

The Hollywood workforce has shrunk by more than 42,000 jobs between 2022 and 2024, according to a recent study. The economy has not bounced back following shutdowns due to the COVID-19 pandemic, followed by the twin labor strikes three years ago.

Thousands of film workers have been searching for work — but many of the big opportunities have moved abroad.

The strikes prompted studio executives to reset their output after previously spending big to build streaming services to compete with Netflix.

Two other consolidations led to widespread cutbacks: Walt Disney Co.’s acquisition of Fox entertainment assets in 2019, and Discovery’s takeover of AT&T’s WarnerMedia four years ago.

The resulting entity — Warner Bros. Discovery, led by David Zaslav — instituted deep cost cuts and thousands of layoffs to cut expenses because the firm was nearly drowning in deal debt — $43 billion — from the day Zaslav took the helm.

Paramount’s proposed takeover of Warner Bros. would result in a significantly higher debt load, $79 billion in debt, prompting concerns from the group and others about further cuts.

Tech scion David Ellison, son of billionaire Oracle co-founder Larry Ellison, is leading the effort to buy Warner Bros. Discovery to prop up Paramount, which the family acquired in August. Ellison’s Paramount Skydance prevailed in a nearly six month bidding war in late February after Netflix bowed out when the elder Ellison agreed to financially back his son’s $111-billion deal.

Warner shareholders will be asked to approve the merger April 23.

Ellison is pushing to wrap the deal up this summer.

“We are deeply concerned by indications of support for this merger that prioritize the interests of a small group of powerful stakeholders over the broader public good,” the letter said. “The integrity, independence, and diversity of our industry would be grievously compromised. Competition is essential for a healthy economy and a healthy democracy. So is thoughtful regulation and enforcement.”

The group urged California Atty. Gen. Rob Bonta and his fellow state attorneys general to sue to block the transaction.

Bonta has told The Times that his office is reviewing the transaction to see if it violates anti-trust rules. Two historic movie studios, several streaming services and dozens of cable channels would be brought under one roof.

“Media consolidation has already weakened one of America’s most vital global industries,” the group said, “one that has long shaped culture and connected people around the world.”

Bonta’s office is leading the charge against another merger, TV station giant Nexstar Media Group’s $6.2-billion takeover Virginia-based Tegna. Eight state attorneys general, including Bonta, have sued to block that deal. A judge is expected to rule on whether to issue a preliminary injunction later this week.

Should Paramount Skydance prevail in its $111-billion takeover of Warner Bros. Discovery, the Larry Ellison family would control two historic Hollywood film studios, dozens of cable channels, HBO and two legendary newsrooms, CBS News and CNN.

Concerns about the potential loss of more Hollywood jobs, and questions about newsroom independence dominated a hearing Friday to address Los Angeles’ crisis of shrinking film and TV production jobs.

Paramount wants to wrap up its Warner merger by September — a rapid timetable. The takeover deal, which was struck last month after Netflix bowed out, would put HBO and CNN under the control of Larry Ellison and his son David, the chairman of Paramount, which includes CBS.

Both Ellisons maintain friendly relations with President Trump. Those bonds, along with challenges to legacy media and changes at CBS News in recent months, sparked handwringing during the hearing called by Sen. Adam Schiff (D-Burbank) and Rep. Laura Friedman (D-Glendale).

“The questions surrounding this merger go beyond jobs, contracts and consumers,” Schiff said. “They also go to editorial independence of two of America’s most significant news organizations, CNN and CBS News.”

Trump has long agitated for changes at CNN, and members of his cabinet, including War Secretary Pete Hegseth, have openly cheered for an Ellison takeover of CNN.

To pave the way for the Ellisons’ purchase of Paramount, the company paid $16 million to Trump last summer to settle his lawsuit over edits to a “60 Minutes” interview with Kamala Harris in October 2024. Most 1st Amendment experts had deemed Trump’s suit “frivolous.”

Since the Ellisons took the helm, there has been a change in direction at CBS News and a reduction in its size and scope. Staff members at CNN are bracing for similar changes, including to the tone of its newscasts.

In addition to the long-term health of Los Angeles’ film economy, the merger’s fate could determine “whether we have state sponsored media … or whether we have journalists who can truly follow the story,” Friedman said.

A Paramount spokesperson declined to comment.

The deal is currently before regulators in the U.S. and abroad.

Paramount Chairman David Ellison has vowed to “build a stronger Hollywood,” by increasing the creative output of the two legendary movie studios — Paramount and Warner Bros. — to 30 theatrical releases a year. Warner Bros., which owns such prominent franchises as “The Matrix,” Batman, Harry Potter, “The Big Bang Theory,” and “Friends,” has long been one of Hollywood’s most prolific studios.

But Paramount has suffered from years of under-investment and Ellison and his team have been working to boost the film pipeline.

Ellison has also pledged to keep both studio lots and preserve HBO.

“HBO will continue to operate independently under our ownership, enabling it to create more of the world-class content it is renowened for,” Ellison wrote in the Feb. 28 letter to Schiff and Friedman, responding to their concerns about consolidation.

During Friday’s hearing, the lawmakers turned to former CNN anchor Jim Acosta, who famously jousted with Trump during his first term, for his reflections. He was asked whether any “guardrails” could protect against potential merger harms.

“If this merger goes through, the guard-rails are gone,” Acosta said bluntly. “If we continue to go down this road it will be lights-out for the news industry… We need media options that are not controlled by the wealthiest and most powerful people in the country.”

The hearing occurred the same day that CBS News imposed another sweeping round of layoffs and disbanded its CBS News radio network. It also came the same week as Trump’s Federal Communications Commission approved a massive television station merger, which will allow Texas-based Nexstar Media Group to control more than 250 stations, despite a legal challenge from state attorneys general.

The proposed Paramount-Warner merger would prompt at least $6 billion in cost savings, according to Paramount. Industry veterans warn that billions more in cuts may be necessary to make the deal math work.

A combined Paramount-Warner would carry nearly $80 billion in debt, a legacy of the proposed leveraged buyout and the mergers that came before it.

The hearing at Burbank City Hall —“Lights, Camera, Competition”: Promoting American Film Production,” — was wide-ranging. Award-winning actor Noah Wyle, the star and a producer of Warner Bros.’ “The Pitt,” discussed the need to bring more productions back to Los Angeles where thousands of out-of-work film professionals have been suffering. “The Pitt” is filmed in Burbank.

“Over the last six years, the aggregate effect of projects leaving the state in search of tax credits, the pandemic and last year’s fires has been a near cratering of our once thriving industry,” Wyle said. “We lost 42,000 film and TV jobs between 2022 and 2024.”

The hearing unfolded down the road from the massive Warner Bros. studio complex, and was held to explore ways to boost the Hollywood economy, including the potential for a national tax credit under consideration in Congress. The campaign is intended to keep film jobs in the U.S. amid an increased migration to Britain, where Warner Bros. maintains an expansive studio complex in London, and other countries that offer generous subsidies.

“Work in the entertainment industry is precarious,” said Matthew D. Loeb, International President of the International Alliance of Theatrical Stage Employees (IATSE). “Past studio mergers have meant fewer jobs.”