The Writers Guild of America has launched a new legal challenge against Paramount Skydance Corp. NASDAQ:PSKY, a film and television entertainment company, and Warner Bros. Discovery Inc. NASDAQ:WBD, a film and television programming company, arguing that their proposed $110 billion merger could weaken competition for writing work. The lawsuit was filed in California federal court on Tuesday, one day after 12 state attorneys general brought a separate case seeking to block the transaction over concerns about competition in film and cable television programming distribution. The two complaints represent the most substantial opposition so far to a deal that has already received clearance from antitrust officials at the U.S. Department of Justice.
The guild, which represents around 18,000 writers through its eastern and western organizations, estimated that the combined company would control approximately 35% of writing jobs for films with budgets of at least $100 million and 36% of television projects at major studios. It argued that reducing the number of major employers could allow the merged business to put pressure on writers' wages, limit job opportunities and reduce programming output. The guild also suggested that a smaller group of major studios could make it easier for companies to underbid one another for writers' services or coordinate employment terms.
Paramount disputed those concerns and said the merger could expand opportunities for writers, pointing to commitments to release at least 30 films annually, maintain full 45-day theatrical windows, continue commissioning work from independent production companies and preserve two separate film studios. Investors may now focus on whether the lawsuits delay or prevent completion of the transaction, particularly because the state attorneys general have asked the court to stop the merger until their case is heard. The closing timeline could carry additional financial implications for Paramount, which must begin making payments to Warner Bros. shareholders for every quarter the transaction remains incomplete after September.