California Attorney General Rob Bonta faces mounting pressure from Hollywood unions urging a settlement in the state’s antitrust lawsuit against Paramount’s $110 billion acquisition of Warner Bros. Discovery, as a federal judge temporarily blocks the megamerger and Paramount weighs moving its operations out of state.
The high-stakes battle over the future of Hollywood’s studio landscape intensified after a federal court granted a temporary restraining order halting the massive entertainment merger. Twelve states led by California filed suit to block the transaction under the Clayton Antitrust Act, arguing that combining two of the industry’s major studios and streaming services would crush competition and harm consumers.
Now, labor leaders representing tens of thousands of industry workers have waded into the fray, demanding that both sides negotiate an end to the prolonged legal standoff before it inflicts permanent damage on an already fragile workforce.
Hollywood Unions Call for Direct Negotiations Over a Settlement
In a joint letter sent on Thursday, the leaders of the Directors Guild of America and IATSE urged California Attorney General Rob Bonta and Paramount Skydance CEO David Ellison to engage directly to negotiate a resolution that addresses anti-competitive concerns without subjecting union members to months of crippling uncertainty. DGA national executive director Russell Hollander and IATSE international president Matthew Loeb warned that their members are already seeing productions delayed or canceled as the companies prepare for a trial scheduled for March 2, 2027.
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“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.”
Russell Hollander and Matthew Loeb, DGA and IATSE leaders, via The Hollywood Reporter
While conceding that mergers historically offer few benefits to workers, the labor chiefs emphasized that prolonged litigation would essentially freeze operations for at least one major studio for nearly a year. Should a settlement prove impossible, the unions asked that both parties move the trial start date up from next March.
To salvage the deal through a binding agreement, the unions suggested specific safeguards, including keeping Paramount and Warner Bros. operating as entirely separate film and television studios. They also proposed that the combined entity commit to producing projects in the United States at no less than the average percentage produced in the United States during the past five years while keeping Paramount based in Los Angeles.
Paramount Threatens to Relocate Operations Out of California
The union intervention arrives as Paramount weighs an aggressive countermeasure against California’s legal opposition. Paramount CEO David Ellison informed senior executives that the company is prepared to begin moving operations out of the state starting Oct. 1 if Attorney General Bonta refuses to negotiate a settlement before then.
Divided Labor Front and Competing Regulatory Stances
The stance taken by the DGA and IATSE puts them at direct odds with other prominent entertainment labor groups.
Xavier Becerra urges California to settle Paramount-Warner Bros. lawsuit ahead of trial
The domestic legal battle also stands in sharp contrast to decisions overseas. Globally, Paramount has secured approval from 20 countries and regions, though European regulators have sought concessions and British authorities are examining the merger.
What Lies Ahead in the Antitrust Battle
With a temporary restraining order freezing the merger, the court will evaluate whether to issue a preliminary injunction that would keep the deal on hold for the duration of the litigation. Paramount maintains that the transaction is wrong on both the facts and the law and benefits creators and consumers alike.
Whether Bonta agrees to settlement talks before the October 1 financial deadline will determine if Paramount initiates its exodus from Southern California or if the two sides prepare for a protracted courtroom showdown ahead of the March 2, 2027 trial date.
