Writers Guild Sues to Block Paramount’s US$81-Billion Warner Takeover

NEW YORK (AP): The Writers Guild of America filed suit on Tuesday to stop Paramount’s US$81-billion purchase of Warner Bros. Discovery, becoming the latest organisation to oppose the transaction. The union contends that the merger would directly damage film and television writers throughout the United States.

In a federal complaint submitted by the Writers Guild of America West and Writers Guild of America East, collectively known as the WGA, the union warned that combining Paramount and Warner would undermine both the financial stability and creative strength of the American entertainment sector.

According to the WGA, the deal would reduce the number of competing employers. It argued that the enlarged company would then have the power and motivation to pay writers less and decrease the number of productions providing work.

WGAE President Tom Fontana said the merged business would become the biggest employer of writers. He warned that its market power could be used to hold down pay, remove entry points for new writers, cut employment throughout the industry and make fewer programmes.

The proposed transaction would unite two of Hollywood’s five remaining traditional studios. Warner properties, including HBO Max, CNN and a catalogue featuring franchises such as Harry Potter, would join Paramount assets that include CBS, Paramount+, and films such as Top Gun.

The lawsuit claims the acquisition would breach antitrust law by weakening competition in three areas of writers’ employment. These are work on episodic television and streaming productions, television writing agreements generally, and screenwriting assignments for major cinema releases.

Paramount, which is owned by Skydance, rejected that position. It said the combined operation would create more opportunities for writers rather than reduce them.

The company repeated its commitment to distribute at least 30 films annually, with each receiving a 45-day period available exclusively in cinemas. Paramount also said it would keep ordering content from independent producers and operate two separate film studios.

In its statement, Paramount said Hollywood’s success would have little value unless it also benefited the writers responsible for its output.

The WGA took legal action one day after 12 states, headed by California Attorney General Rob Bonta, sued to challenge the transaction. That case alleges the merger would wipe out Hollywood competition and leave cinema audiences and cable television customers across the country with fewer options.

The states asked Paramount and Warner to delay completion until a court could thoroughly consider their allegations. They said the companies promptly rejected that request, leading the coalition to submit an emergency federal motion late Monday night. The filing seeks a temporary restraining order and a preliminary injunction to stop the deal immediately.

Paramount responded on Monday that the states’ arguments were incorrect in law and in fact. It promised a vigorous defence of its planned Warner acquisition.

The mounting court challenges could obstruct Paramount’s effort to complete the purchase. Reviews are still under way in the European Union and the United Kingdom, where authorities have indicated that intervention remains possible.

However, the transaction has effectively received approval from several other governments, including the Trump administration in the United States, as well as authorities in China, Canada and Australia.

Paramount and Warner have been aiming to finalise the merger during this year’s third quarter. In their Monday-night request for an immediate halt, the states argued that the companies could seek to close the transaction as soon as July 22.

When Warner’s debt and outstanding shares are included, Paramount’s proposed acquisition has a total value of almost US$111 billion.