The legal battle over one of Hollywood’s biggest proposed mergers has intensified, with Paramount pushing back against claims that its planned combination with Warner Bros. Discovery would reduce competition across the entertainment industry. In a new court filing, the studio argued that the lawsuit brought by a coalition of U.S. states overlooks how the modern film business actually works. According to Paramount, the merger would strengthen the company’s ability to compete rather than give it unfair market power.
The filing comes just days after a group of 12 states challenged the blockbuster deal, seeking to halt the transaction through a temporary restraining order. As the case heads toward a key court hearing, both sides are presenting sharply different views on what the merger could mean for movie theaters, cable providers, and the future of the media business.
Paramount says competition will remain strong
In its response filed on Thursday, Paramount described the lawsuit as “one of the weakest merger challenges in modern antitrust history.” The company argued that the entertainment industry remains highly competitive and that several major studios are well-positioned to expand their businesses if market opportunities arise. Rather than reducing competition, Paramount believes the merger would allow it to compete more effectively against an increasingly crowded media landscape.
The studio pointed to established rivals including Universal, Disney, Amazon MGM Studios, Sony Pictures, Lionsgate, A24, and NEON as evidence that the theatrical distribution market remains dynamic. Paramount argued that these companies have the resources to increase film production and distribution if another studio scales back, making concerns over market concentration less convincing. In its filing, the company maintained that the transaction would lead to greater theatrical output instead of limiting it.
Paramount’s legal team also rejected claims that the merger would negatively affect theaters through higher prices or fewer film releases. The company argued that the economics of movie distribution encourage studios to release more films because wider theatrical availability ultimately benefits revenue. According to the filing, the merger’s financial incentives support growth rather than restricting access for exhibitors.
States warn of growing market concentration
The lawsuit was filed earlier this week by a coalition of 12 states led by California Attorney General Rob Bonta. The states claim that combining Paramount and Warner Bros. Discovery would significantly increase concentration in the blockbuster film distribution business. They argue that the merged company would control roughly 30% of the market, while four major studios—including Disney, Universal, Sony, and the combined Paramount-Warner Bros. entity—would account for approximately 93% of blockbuster distribution.
State attorneys also expressed concerns about the television business beyond movie releases. They argued that Paramount and Warner Bros. Discovery are already among the largest owners of basic cable networks, and that bringing those assets under one company could increase its negotiating power with cable and satellite television providers. According to the lawsuit, that additional leverage could reduce competition and place distributors at a disadvantage during carriage negotiations.
Paramount disagreed with that assessment, saying its cable portfolio and Warner Bros. Discovery’s networks serve different audiences and complement one another rather than directly competing. The company argued that television providers would still need access to both sets of channels, regardless of whether they operate under a single corporate umbrella.
Changing media landscape shapes the argument
A major part of Paramount’s defense focuses on how rapidly the entertainment business has changed in recent years. The company argued that the steady decline of traditional pay-TV subscriptions has weakened the bargaining position of every cable programmer, regardless of size. As more consumers move to streaming platforms, affiliate fee revenue continues to shrink, reducing the market power that cable network owners once enjoyed.
Paramount also highlighted the recent success of Amazon MGM Studios, pointing to the strong performance of Project Hail Mary as an example of how newer or expanding distributors can quickly gain momentum. The company argued that studios such as Amazon MGM, Lionsgate, and A24 could increase production if market demand rises, making it difficult for any single company to dominate theatrical distribution.
The court filing marks the first time Paramount has fully detailed its legal strategy since the lawsuit was announced. The company’s response lays the groundwork for a broader defense that the merger would help it compete in a rapidly evolving entertainment industry where streaming services, global studios, and independent distributors are all battling for audiences.
A federal hearing on the states’ request for a temporary injunction is scheduled for Friday before Judge Araceli Martinez-Olguin. The outcome will determine whether the proposed merger can continue moving forward while the broader antitrust case is litigated. Given the scale of the deal and its potential impact on Hollywood, the decision is expected to be closely watched across the media and entertainment industries.
