Labor & Employment Law Daily Wrap Up, LABOR NEWS—Writers Guild of America challenges Paramount's planned buyout of Warner Bros., (Jul 17, 2026)

By Kenneth H. Ryesky, M.B.A., J.D.

Complaint was filed one day after several state attorneys general had similarly sought to enjoin the acquisition, notwithstanding the Justice Department's approval of the deal.

Two separate but interactive labor unions for writers in the entertainment mass media industry have filed a complaint in the San Francisco federal district court seeking to enjoin the planned acquisition of Warner Bros. Discovery, Inc. by Paramount Skydance Corp. The complaint alleges that the deal would create a monopsony that harms competition for the services of writers in the industry (Writers Guild of America, West, Inc. v. Paramount Skydance Corp., No. 3:26-cv-07212 (D. Kan. July 14, 2026)).

Background. Warner Bros. Discovery, Inc. (Warner Bros.) was formed in 2022 through a spin-off from AT&T and a merger; the entity is a multinational mass media and entertainment conglomerate. In the wake of revenues that fell short of projections, personnel retrenchments, and other issues, Warner Bros. entertained proposals to be acquired by other entities. A tentative initial acquisition agreement to be acquired by Netflix, Inc. was reached in December 2025, but that proposal fell through. On April 23, 2026, Warner Bros. agreed to be acquired by Paramount Skydance Corp. (Paramount). On June 12, 2026, the DoJ Antitrust Division announced its approval of the $110 billion deal. Also, on July 13, 2026, the attorneys general of 12 states filed a lawsuit to enjoin the consummation of that acquisition deal.

The next day, two sister labor unions, the Writers Guild of America, West, Inc. and Writers Guild of America, East, Inc., together representing approximately 18,000 members (collectively, Writers Guild) filed this antitrust lawsuit to enjoin the merger deal, which is slated to be completed by a September 30, 2026, deadline before per-share ticking fees come into play.

The relevant markets. Within the relevant United States geographical market, the Writers Guild complaint describes relevant labor service markets for writers. The conditions of employment, and the practices and recognitions within the industry, have created different markets for writers for television production and for writers for film production; within the respective television and film industries are different types of conditions for different grades of writers. For each of these markets, the writers' strongest negotiating point with his or her employer is a "credible ability to walk away" and provide their services to a different employer. The proposed acquisition in an already highly vertically-integrated industry would effectively reduce the numbers of alternative employers to whom the writers might "walk away."

Anticompetitive effects. The complaint asserts that the transaction, if consummated, would (1) substantially lessen competition for writers' services in each relevant market; (2) lead to reduced wages for writers; (3) reduce the quantity, diversity, and ultimately the creative quality within the industry; and (4) increase the likelihood of coordination and collusion among the employers of writers.

The complaint quotes statistics to demonstrate that the proposed deal is presumptively illegal. The Herfindahl-Hirschman Index (HHI) is used in the Merger Guidelines jointly promulgated by the DoJ and the FTC. Per the merger guidelines, a HHI of more than 1,800 or a merger that results in an increase of more than 100 HHI points is presumptively illegal. The complaint graphically shows that the proposed merger would exceed each of these metrics.

The complaint also recites examples of anticompetitive effects from past mergers and acquisitions in the industry, and past statements of noted directors and producers. Disney's 2019 acquisition of 21st Century Fox, the complaint states, has resulted in a situation in which "it is widely understood that [the entities within Disney] do not earnestly compete with one another for programming—and writers have responded accordingly, no longer treating them as distinct buyers." The complaint further notes that following that acquisition, Disney's annual wide-release films rate fell to one-half of what it had been, even with the effects of the COVID pandemic factored out.

The two Writers Guilds argue that the proposed deal "will not generate any meaningful efficiencies or benefits for competition in the relevant markets," noting that "Paramount has predicted over $6 billion in synergies from the Merger, with mass job losses inevitable."

The Case is No. 3:26-cv-07212.

Judge: Kang, P.

Attorneys: David C. Brownstein (Farmer Brownstein Jaeger Goldstein Siegel & Shepard LLP) for Writers Guild of America, West, Inc. Daniel M. Petrocelli (O'Melveny & Meyers LLP) for Warner Bros. Discovery, Inc.

Companies: Writers Guild of America, West, Inc.; Paramount Skydance Corp.; Warner Bros. Discovery, Inc.

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