PSKY, WBD – With State AG Lawsuit Filed, We Examine Key Considerations

Research evidence excerpt

PSKY, WBD – With State AG Lawsuit Filed, We Examine Key Considerations

ent under the complaint parameters, but

four packages at $2.0B-$3.0B in affiliate fees clearing both thresholds), and frame the

General Dynamics precedent for rebutting structural presumptions in declining industries.

We note that each stock outperformed the broader market today by over 2% despite the

filing. We will continue to monitor developments.

States Sue to Block Merger; Paramount Skydance Responds

A coalition of 12 Democratic state attorneys general filed a Clayton Act Section 7

complaint in the U.S. District Court for the Northern District of California on July 13,

2026 to block Paramount Skydance's proposed acquisition of Warner Bros. Discovery

(link to complaint). The coalition is led by California AG Rob Bonta and includes Arizona,

Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New

York, Oregon, and Washington. The suit defines three relevant markets: (1) wide-release

theatrical film distribution (600+ theatres), (2) top-grossing/blockbuster theatrical (≥3,000

theatres), and (3) licensed basic cable networks. The states did not seek a temporary

restraining order (TRO), which would have required demonstrating immediate irreparable

harm; instead, the complaint indicates the coalition intends to seek a preliminary injunction,

per the filing.

Notably, the filing follows the DOJ's June 12 unconditional clearance of the transaction

and 24 other global regulatory approvals secured to date. Two material reviews remain

ongoing: the European Commission set a provisional decision deadline of July 22, 2026

after Paramount submitted concessions (including exiting its international distribution deal