Reuters reported that Cinema United urged California Attorney General Rob Bonta and Paramount Skydance to discuss settling the lawsuit over Paramount’s proposed Warner Bros. Discovery acquisition. The outcome could affect theaters, their workers and moviegoers because the states claim the deal would reduce competition over films, prices and employment.
Key Facts
- Reuters reported that Cinema United requested settlement talks and enforceable protections for theaters and moviegoers.
- California and 11 other jurisdictions are asking a federal court to block the proposed $110 billion acquisition.
- The companies cannot close the transaction under the court’s existing order.
- A 12-court-day trial is scheduled for March 2 through March 19, 2027.
What Cinema United wants
Cinema United represents theater owners rather than either side in the lawsuit. Its appeal is outside the court case and does not change the companies’ legal obligations.
Reuters reported that the group sent its request to Bonta and Paramount CEO David Ellison. It asked for tangible, enforceable protections covering theaters and their customers.
According to Reuters, the requested protections include maintaining or expanding wide film releases and preventing higher film-rental fees. The group also wants theaters to retain access to the film libraries controlled by both studios.
The proposal does not amount to an unconditional endorsement of the acquisition. Cinema United previously warned that further studio consolidation could reduce the number of movies released in theaters.
Why the states sued
California and 11 other jurisdictions filed the federal antitrust lawsuit on July 13. They allege that the proposed $110 billion combination would violate Section 7 of the Clayton Act.
That law bars acquisitions when their likely effect is to substantially reduce competition. The lawsuit asks the court to prevent Paramount from acquiring Warner Bros. Discovery.
The states allege that combining two major film distributors would give the resulting company greater leverage over theaters. They contend that theaters could face tougher rental terms while customers could encounter higher prices and fewer film choices.
The states also allege possible harm to television distributors and entertainment workers. These claims are allegations and have not been finally decided.
Bonta maintained the states’ opposition after Cinema United’s appeal. Reuters reported that he said the transaction would violate the law and cause job losses, wage cuts and higher consumer prices.
Paramount disputes the case
Paramount says the acquisition would strengthen competition and increase its ability to invest in entertainment. It disputes the states’ market definitions and claims about likely harm.
Before Cinema United’s appeal, Paramount publicly urged the 12 attorneys general to negotiate. The company said it had offered commitments and concessions and remained willing to seek a resolution.
Those statements establish Paramount’s support for talks, not an agreement by the states to negotiate or settle.
What happens next
The companies remain barred from closing the transaction under the court’s existing order. That restraint preserves the current situation while the case proceeds; it is not a final ruling that the acquisition is lawful or unlawful.
The court has scheduled a 12-court-day trial from March 2 through March 19, 2027. Cinema United’s appeal does not dismiss the lawsuit, approve the merger or require the court to adopt its requested protections.
