NEW YORK (AP) 鈥� The Writers Guild of America became the latest group Paramount’s on Tuesday, filing a lawsuit that seeks to block the merger on the grounds it would cause 鈥渟pecific harm鈥� to movie and TV writers working across the U.S.
A Paramount-Warner merger 鈥渢hreatens the economic and creative health of the American entertainment industry,鈥� reads Tuesday’s federal complaint, which was filed by both the Writers Guild of America West and Writers Guild of America East (jointly the WGA).
The union argued that the merger would create less competitors and give the larger company 鈥渂oth the incentive and the ability鈥� to lower wages and the number of projects that offer workers employment.
鈥淭his proposed combined entity would be the largest employer of writers, with tremendous power to suppress our wages, eliminate opportunities for emerging writers, cut jobs across the industry, and produce less programming,” WGAE President Tom Fontana said in a statement.
A Warner-Paramount tie-up would bring together in Hollywood. It putting Warner鈥檚 HBO Max, its libraries filled with popular titles like 鈥淗arry Potter鈥� and under the same roof of Paramount-owned CBS, movies like 鈥淭op Gun鈥� and the Paramount+ streaming service.
Tuesday鈥檚 complaint alleges that the merger violates antitrust law by reducing competition in three markets for writers: writing for episodic TV and streaming series, TV writing deals overall and screenwriting for the biggest theatrical films.
In response, Skydance-owned Paramount maintained that a combined Warner-Paramount would allow the company to 鈥渆xpand opportunities for writers, not shrink them.鈥� It also reiterated pledges with a 45-day window exclusive to theaters 鈥� and said it would continue to commission from independent production companies while maintaining 鈥渢wo distinct film studios.鈥�
鈥淎 stronger Hollywood only means something if it鈥檚 stronger for the writers who power it,” the company said in a statement.
The WGA’s complaint arrives a day after 12 states, led by California Attorney General Rob Bonta, filed a lawsuit , alleging that it would 鈥渆xtinguish competition鈥� in Hollywood and lead to fewer choices for moviegoers and cable TV customers nationwide.
The coalition of states called on Warner and Paramount to not close the merger until after a court had time to 鈥渇ully evaluate鈥� their claims. But they said the companies quickly refused 鈥� and late Monday night, the group filed an emergency motion in federal court seeking a temporary restraining order and preliminary injunction aimed at immediately halting the deal.
Paramount on Monday called the states’ claims 鈥渨rong on both the facts and the law鈥� and vowed to 鈥渧igorously defend鈥� its Warner acquisition.
The growing list of legal challenges could become a roadblock in Paramount鈥檚 quest to complete its purchase of Warner. Other regulatory reviews are ongoing in the European Union and in the U.K., which has suggested it may intervene. But Paramount has also racked up effective green lights from a handful of other countries, including , China, Canada and Australia.
Paramount and Warner have hoped to close their deal sometime in the third quarter of this year. In Monday night’s motion seeking an immediate pause, the states said the companies may try to complete the process as early as July 22.
Including debt, Paramount鈥檚 proposed purchase of Warner is valued at nearly $111 billion based on outstanding shares.
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