Several US states are understood to be preparing legal action to prevent Paramount Skydance from completing its £87billion takeover of Warner Bros Discovery.
Sources told Reuters that multiple states are planning to intervene before the deal goes through amid concerns over a new media monopoly will be created with the Trump-allied Ellison family at the helm.
California's Attorney General Rob Bonta indicated in a Reuters interview on Thursday that his office was approaching a decision on potential intervention.
A representative for Bonta's office refused to provide comment when approached on Friday regarding the prospective litigation against the entertainment industry mega-merger.
States are preparing to take action over the Paramount-Warner Bros deal
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Shares in Warner Bros Discovery dropped 1.8 per cent following reports of the impending legal challenge, whilst Paramount stock extended earlier losses to fall four per cent.
The proposed transaction has attracted intense scrutiny from both Hollywood and financial markets given its potential to unite some of entertainment's most storied properties under a single corporate umbrella.
Opposition to the deal has emerged from actors, writers and other creative professionals within the film industry who fear significant workforce reductions.
Paramount has rejected claims that the acquisition would diminish creative employment, arguing instead that expanded content production will be necessary to grow its streaming subscriber base.
The Ellisons are allied with the Trump administration
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Paramount has launched a hostile takeover offer for Warner. Bros | GETTY The merger agreement between Paramount Skydance Corporation and Warner Bros Discovery was formally announced in February 2026, with Paramount offering $31 per share in cash for all WBD stock.
Both company boards gave unanimous approval to the transaction, which is anticipated to complete during the third quarter of this year.
The combined entity would control an extensive catalogue of intellectual property spanning franchises such as Game of Thrones, Harry Potter, Mission Impossible, Top Gun, the DC Universe and SpongeBob SquarePants.
Paramount has projected the deal will generate more than $6 billion in synergies through technology consolidation, procurement efficiencies and streamlined streaming operations.
President Trump's connection to the Ellisons has came under scrutiny
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The acquisition represented a significant departure from an earlier competing offer by Netflix, which had previously secured an agreement to purchase WBD before Paramount submitted a revised proposal.
WBD's board concluded that Paramount's all-cash bid qualified as a superior offer under the terms of its existing Netflix arrangement, ultimately abandoning that deal.
Financing for the transaction comprises $47billion in new Class B Paramount shares at $16.02 each, underwritten by the Ellison Family and RedBird Capital Partners.
Paramount has pledged to release at least 30 theatrical films annually and foster long-term creative employment, though industry observers remain doubtful such commitments will survive once cost-cutting measures take effect.