Writers Guild Sues to Block Paramount-Warner Merger, Tennessee Tries to Poach Paramount as California Lawsuit Heads to Court Friday

Since California Attorney General Rob Bonta and 11 other states sued Monday to block Paramount Skydance's $81 billion acquisition of Warner Bros. Discovery, the legal and political fallout has moved fast. The Writers Guild of America filed its own federal lawsuit Tuesday, and Tennessee's deputy governor is now publicly lobbying Paramount CEO David Ellison to move the company out of California entirely.

The Writers Guild of America West and East filed a joint complaint Tuesday arguing the merger would let a combined Paramount-Warner "suppress" writer wages and cut the number of projects offering employment, according to the New York Post. WGAE President Tom Fontana said the combined company 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."

The union's complaint targets three specific labor markets: writing for episodic TV and streaming series, TV writing deals generally, and screenwriting for major theatrical films. That's a narrower, more targeted legal theory than the states' antitrust case, which focuses on consumer harm—higher prices, fewer choices, lower quality—rather than labor markets specifically.

Paramount pushed back, telling the Post that a merged company would "expand opportunities for writers, not shrink them," and pointing to its pledge to release at least 30 movies a year with a 45-day theatrical exclusivity window before streaming.

The States' Case and the Friday Hearing

The WGA suit landed a day after California, Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington sued to stop the deal. Bonta said at a news conference that "audiences on every sofa and in every movie seat would feel the impact of this unlawful merger," arguing it would mean higher prices and fewer shows.

The states asked Paramount and Warner to hold off closing the deal until courts could review the claims. When the companies declined, the coalition filed an emergency motion late Monday seeking a temporary restraining order and preliminary injunction. A hearing on that request is scheduled for Friday, and the states have asked the court to rule by July 22.

Paramount has called the states' claims "wrong on both the facts and the law" and says it will "vigorously defend" the acquisition, arguing the combined company would be a stronger competitor against dominant streaming and tech platforms that have hurt theatrical exhibition and entertainment jobs.

Paramount agreed to pay shareholders a 25-cent-per-share "ticking fee" each quarter if the deal isn't closed by September 30, and it's on the hook for a $7 billion regulatory termination fee if the merger collapses.

Tennessee's Pitch and the California Fight

As the legal fight escalates, Tennessee is making a play to poach the company. Deputy Governor Stuart McWhorter sent a letter to Ellison on July 2 urging him to consider relocating Paramount Skydance's headquarters to the state. McWhorter touted Tennessee's low taxes, "predictable government," and Nashville's entertainment and tech workforce, writing that "few leaders have the opportunity to redefine an iconic company while simultaneously shaping the future of an industry."

Paramount has reason to consider it. Sources told Semafor that Ellison's own advisers have nudged him to consider moving the business out of California if Bonta succeeds in blocking the merger. The company already signed a lease last year for nearly 300,000 square feet of studio space in Bayonne, New Jersey. Still, people close to Ellison say he remains "wary" of leaving California after having moved the company from New York to Los Angeles.

According to Breitbart, Paramount has privately offered Bonta a consent decree committing to produce 30 films annually with a 45-day theatrical window and a 90-day streaming window, while pledging to keep both studio lots open in California and pointing to roughly $30 billion in annual content spending. One Ellison adviser told Semafor that Bonta has created an "inhospitable" environment for the studio. Bonta, for his part, told MSNOW last month there were "red flags in the air everywhere" and that he was "concerned about job loss and prices being increased."

Paramount says its commitments to theatrical releases, job creation, and $30 billion in annual spending answer the states' concerns. Bonta and the 11 other attorneys general, backed now by the Writers Guild, argue those pledges don't offset the structural loss of competition when two of Hollywood's five remaining legacy studios merge into one.

Separately, Paramount CEO David Ellison has spent at least six months in exploratory meetings on a federal film tax incentive bill with bipartisan support, meeting with Republican leaders in Washington on Monday. Hollywood labor unions including the DGA, IATSE and SAG-AFTRA back the idea, and the DGA's newly negotiated contract requires studio executives to lobby for better domestic filming incentives. No such federal program currently exists. California's own state tax credit is capped at $750 million.

Friday's hearing in federal court will determine whether the merger can proceed while litigation continues, or whether a restraining order freezes the deal in place. The court has been asked to rule on the underlying injunction request by July 22, a deadline that puts real pressure on Paramount's plan to close the transaction sometime in the third quarter of this year.