Attorney General Jennifer Davenport joined a coalition of 12 attorneys general in filing a lawsuit challenging the $110 billion acquisition of Warner Bros. Discovery, Inc. (Warner Bros.) by Paramount Skydance Corporation (Paramount).
“New Jersey is the birthplace of the American film industry, and the state is now a burgeoning hub for film and television production. Given our state’s leadership in the film and television industry, we must protect our residents when corporate media monopolies threaten to upend the industry by raising prices and reducing content choices,” Attorney General Jennifer Davenport said in a statement on Tuesday, July 14.
“The proposed merger between Paramount and Warner Bros. Discovery will hurt our state’s residents, plain and simple. We will always stand up against corporate monopolists that seek to exploit hardworking New Jerseyans by driving up prices and turning a massive profit at their expense,” Davenport added.
Davenport joins the attorneys general of California, Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Mexico, New York, Oregon, and Washington.
In New Jersey, the Attorney General is represented in the matter by Deputy Attorney General Anasemoun W. Robinson, under the supervision of Assistant Section Chief Laura E. Sedlak and Assistant Attorney General Brian McDonough within the Division of Law’s Affirmative Civil Enforcement Practice Group.
Under the proposed merger, two of Hollywood’s five major film distributors and two of the five major basic cable companies would be combined. As a result, the merger would extinguish competition between Paramount and Warner Bros. and inflict substantial harm on movie theaters, basic cable distributors, and, ultimately, consumers nationwide,” according to the statement.
In the United States alone, if allowed to merge, the combined titan would control roughly one-third of theatrical motion pictures and nearly one-third of basic cable programming.
The coalition has asked Warner Bros. and Paramount not to close the merger until after the judicial process concludes–and if the companies do not agree, the coalition will be filing an application for a temporary restraining order to prevent the merger from closing while the case proceeds in court.
Warner Bros. and Paramount: Century of Creativity
For more than a century, Warner Bros. and Paramount have stood as independent sources of creativity and competition in the film and television industry. The lawsuit, filed in the U.S. District Court for the Northern District of California, alleges that the merger violates Section 7 of the Clayton Act, which prohibits mergers that may substantially lessen competition or tend to create a monopoly.
The attorneys general allege that if Warner Bros. and Paramount are allowed to merge the merger would lessen competition in the areas of:
- Wide Release Theatrical Film Distribution, where Warner Bros. and Paramount are two of the five major film distributors and would combine for an around 27% share of the market. After the merger, only three distributors will control 75% of these films, and only four distributors (Defendants, Disney, Universal, and Sony) will control 86% of them.
- Anticipated Top-Grossing Theatrical Film Distribution, a submarket of theatrical film distribution focused on anticipated blockbuster films with wide audiences and large production budgets. After the merger, Defendants will control more than 30% of these films, and four distributors (Defendants, Disney, Universal, and Sony) will control more than 90% of them.
- Licensing Basic Cable Television Channels, or the market for distributing basic cable channels to cable and satellite providers. Warner Bros. is the second-largest, and Paramount is the third-largest in this market; together, they would account for a 27% share.
Currently, Paramount and Warner Bros. compete fiercely to create and distribute new, different, and innovative film and television content to American viewers. To promote their films, they negotiate with thousands of movie theaters across the country to secure the most coveted screens and calendar slots. Movie theaters rely on competition between Paramount and Warner Bros. to incentivize creativity and secure competitive prices and terms for themselves and for audiences.
Paramount and Warner Bros. also compete to market their basic cable channels. To acquire the rights to distribute that content to subscribers, distributors negotiate with Paramount, Warner Bros., and other cable channel owners. The availability of alternatives is essential in these negotiations.
For example, if Paramount insists on “onerous financial terms,” the distributor can gain leverage by turning to Warner Bros. — and vice versa.
“Distributors rely on competition between entertainment companies to secure low prices for themselves and for their subscribers, and to encourage programmers to invest in new and exciting content for television,” per the press release.
Paramount’s proposed acquisition of Warner Bros. will end this competition between the two merging companies, threatening viewers with higher prices, a decline in theatrical film exhibition, and a reduction in the variety, quality, and amount of content distributed.
Filmmaking in Meadowlands and Across New Jersey
New Jersey’s film industry is undergoing a massive resurgence, backed by aggressive tax incentives and major studio developments. Industry leaders like Netflix, Lionsgate, and 1888 Studios are building or operating major soundstages in Fort Monmouth, Newark, and Bayonne. The state also features over 50 “Film Ready” communities that streamline permitting for local and independent creators.
The Colonial Diner in Lyndhurst, NJ, has served as a location for several projects, with filming happening as recently as July 13. The diner’s Orient Way location is part of the backdrop for the upcoming Netflix action-comedy “Bad Day” starring Cameron Diaz. The diner was also used as a production site for the Max original film “Sweethearts” and hosted a shoot for “America’s Best Restaurants.”
New Yorker Maggie Gyllenhaal’s gothic romance-horror film The Bride!, released in March by Warner Bros., featured downtown Newark locations during production. Gyllenhaal wrote, directed, and produced the film and shot major scenes inside Newark’s historic, abandoned Washington Street trolley tunnel.
The Screen Alliance of New Jersey focuses on the predictable, transparent, and sustainable NJ Film and Digital Media Tax Credit Program. Overall in-state production spending from filmmaking exceeded $650 million dollars in 2022, besting the previous record of $500 million set in 2021.
When Happy Gilmore 2 was filmed in New Jersey in 2024, it generated about $152 million for state businesses.
Today, the Garden State offers tax credits up to 40% for film and digital media productions. The industry began in the Garden State with Thomas Edison’s inventions and early filmmaking in Fort Lee.
