Two major Hollywood labor unions are urging California Attorney General Rob Bonta and Paramount Skydance CEO David Ellison to negotiate a settlement in their antitrust lawsuit, warning that a delayed March 2027 trial date threatens industry jobs and active productions across Los Angeles.
The push from organized labor brings a fresh tactical split to the entertainment industry as a multi-state legal battle unfolds over Paramount’s proposed acquisition of Warner Bros. Discovery. While groups like the Writers Guild of America have pushed to block the transaction entirely, the leaders of the Directors Guild of America and IATSE are taking a different path. In a letter sent Thursday, DGA national executive director Russell Hollander and IATSE international president Matthew Loeb asked state and corporate leaders to bypass a prolonged court fight and hammer out binding conditions instead.
Union Leaders Warn of Production Freezes Ahead of March 2027 Trial
Representing roughly 200,000 entertainment workers, the union chiefs argued that their members are already seeing active projects put on hold or canceled as the two companies prepare for a March 2027 antitrust trial. Against an already lean employment backdrop in the Los Angeles area, the leaders cautioned that additional uncertainty will fall directly on the rank and file.
“We write to raise concerns about the potential for a prolonged timetable for the litigation… and express to you the importance that you engage directly with each other to negotiate a resolution that ameliorates the anti-competitive aspects of the proposed merger.”
To salvage the deal without harming employment, the unions proposed enforceable safeguards. Their suggested terms include keeping Paramount and Warner Bros. operating as entirely separate film and television studios, requiring the combined company to commit to domestic production levels matching at least the average of the past five years, and keeping Paramount based in Los Angeles.
Twelve State Attorneys General Sue to Block the Mega-Merger
The union intervention lands in the middle of a high-stakes legal confrontation led by California. Earlier this month, a coalition of 12 Democratic states filed a lawsuit in the U.S. District Court for the Northern District of California to halt the transaction, arguing it violates Section 7 of the Clayton Act. Standing before the Hollywood sign, California Attorney General Rob Bonta called the transaction an illegal merger that would extinguish competition across the entertainment sector.
Colorado Attorney General Phil Weiser echoed those concerns in a separate statement, warning that the combined entity would eliminate competition between major film studios and cable distributors while harming audiences across the country. The state lawsuit contends that the deal would concentrate two of the nation’s five major film distributors and two of its top five basic cable companies under one corporate umbrella.
Paramount Counters Antitrust Claims and Faces Rising Ticking Fees
Paramount has pushed back aggressively against the legal challenge, calling the multi-state lawsuit wrong on both the facts and the law. Representatives for Paramount argue the acquisition is necessary to build a well-capitalized studio capable of competing against cash-rich tech giants like Netflix, Amazon, and Apple that currently dominate the market for audiences and creative talent.
State attorneys general retained independent authority to challenge it. Meanwhile, the legal delay carries a steep financial price. Paramount CEO David Ellison agreed to pay Warner Bros. Discovery shareholders a 25-cent-per-share fee for every quarter the deal remains unclosed past October, amounting to roughly $650 million in quarterly cash.
A Threatened Exit and Pending Court Decisions
Tensions between the studio and state regulators escalated further amid reports that Ellison’s advisers weighed moving Paramount’s headquarters out of California if the state pursued legal action, a maneuver critics labeled as blackmail and one that would strip $30 million in planned local spending from the state economy. Paramount and Warner Bros. have since agreed to pause their transaction until June 1, 2027, or until a federal judge resolves the lawsuit, following a temporary restraining order issued in the California federal court.