The lawsuit follows a separate challenge from 12 state attorneys general as opposition to the proposed Hollywood merger continues to grow.
The Writers Guild of America has filed a federal lawsuit seeking to block the proposed Paramount Skydance and Warner Bros. Discovery merger. Photo courtesy of the Writers Guild of America.
A new day means new problems for the proposed Paramount-Warner Bros. Discovery merger. Yesterday, 12 state attorneys general sued to block the merger, and today the Writers Guild of America has filed a lawsuit as well, effectively trying to block the $110 billion deal. The suit was filed in U.S. District Court for the Northern District of California.
Citing antitrust law, the suit claims the deal would harm wages and working conditions for writers by creating one mega-buying entity of television and film programming with outsized power. If the proposed merger were to be allowed, it would create a corporation with the largest buying power of original movies and television programming, essentially eliminating competition from various companies. This vigorous competition for content has operated for over a century.
The lawsuit states, “The proposed Paramount-Warner Bros. merger ("Merger") threatens the economic and creative health of the American entertainment industry. The Merger would eliminate competition for buying film and television writing, resulting in suppressed compensation, worse deal terms, and reduced programming volume and diversity.” The labor union feels “The merger must be blocked.”
A Paramount Skydance spokesperson reiterated previous assertions that the merger would lead to a healthier Hollywood with more opportunities for its workers. They said they plan to greenlight more films, increase development slates, and continue their strong commitment to working with the guild's writers across their brands.
They continued, “As a century-old storytelling company, we have deep respect for the WGA and its members, as evidenced by our commitments in our recently renewed collective bargaining agreement, and we remain committed to building a combined company that expands opportunities for writers and creative talent for generations to come. The alternative to our transaction is a continued decline of the entertainment industry increasingly dominated by big tech companies.”
The lawsuit argues that the combination of Warner Bros. Discovery and Paramount would disrupt the fragile harmony that currently creates an atmosphere of healthy competition.
“With fewer competitors, the merged Paramount-Warner Bros. entity would have both the incentive and the ability to lower costs by suppressing writers' wages and reducing output. Writers will be paid less and have fewer employment opportunities,” the complaint reads.
The union believes this merger would create a company with more than 30 percent market share, breaching Supreme Court precedent that found market share exceeding that amount to be “presumptively anticompetitive.” Between 2021 and 2024, Paramount and Warner Bros. collectively accounted for 35 percent of film writing jobs and 36 percent of television writing projects between 2022 and 2025, amounting to 38 percent of overall deals between 2021 and 2024, according to the WGA.
The WGA also doesn't find any evidence behind Paramount Skydance CEO David Ellison's assurances that a merged Paramount and Warner Bros. Discovery would each release 15 films a year theatrically. Nor do they believe the merger will create new opportunities in entertainment. The guild believes these remarks “do not alter the Merger's likely effects and ignore historical precedent and the basic limitations of an annual release calendar.”
The union also believes the $79 billion debt that the merged company would assume will create mass layoffs and reduce the number of projects it produces, rather than augment them.
The union has often opposed corporate consolidation in entertainment, and since the Paramount-Warner Bros. Discovery deal was announced, it has been vocal about the transaction, with its leaders participating in town halls opposing the deal and speaking to its potential consequences.
The WGA is also known for taking on big fights when it feels they are necessary, as evidenced by the recent 148-day strike against major studios in 2023 over issues including sustainable wages, working conditions in the streaming era, and artificial intelligence.
Writers Guild of America West President Michele Mulroney said, “If Paramount succeeds in buying Warner Bros., the merged firm will be the largest buyer of original film and television programming in the United States. This would eliminate competition in an already consolidated industry, threatening the livelihoods of entertainment workers and the creative diversity of TV and film. We applaud the dozen state Attorneys General who have stepped up to enforce our antitrust laws and are proud to file suit alongside them.”
Additional information about the lawsuit is available from the Writers Guild of America.
ABOUT THE AUTHOR
