According to the 12 Democratic state attorneys general who sued this week to block Paramount Skydance’s $110 billion acquisition of Warner Bros. Discovery, the theatrical movie business is “a big business, and it is thriving.” That premise carries the states’ theory of harm, and it does not survive contact with the box office: ticket sales are half what they were a generation ago. The companies call the states’ case “one of the weakest merger challenges in modern antitrust history.” In a crowded field, that is saying something.
The suit came one month after the Justice Department’s Antitrust Division closed an eight-month, 2 million-document investigation, concluding that the deal is not likely to harm competition — indeed, likely to increase it — and imposing not a single condition. Yet on July 20, U.S. District Judge Araceli Martinez-Olguin granted the states a 14-day temporary restraining order, finding compelling evidence that the combined company would hold outsize share of the wide-release theatrical market. That finding deserves scrutiny before it hardens into the basis for a preliminary injunction at the Aug. 3 hearing — because market share in a shrinking, ticket-starved industry means something different than it did a generation ago.
