In an Oakland courtroom earlier this month, lawyers battling over Paramount Skydance’s $110 billion purchase of Warner Bros. Discovery spent part of a hearing debating whether “Obsession” is technically a blockbuster. The 12 states suing to stop the deal have staked their case on a market for “anticipated blockbusters” — films expected, before release, to clear $100 million at the box office, a bet they say only the five major studios can consistently place. By that yardstick, a horror picture made for $750,000 that has grossed north of $400 million worldwide is not a blockbuster, because nobody saw it coming. And when Paramount’s lawyers pointed to Apple’s “F1,” the states’ counsel answered that “Apple makes cell phones, not movies.” That will come as news to anyone who saw Apple’s marketing spend last summer.
Market definition is the whole case. The states need a version of this business in which only five companies can compete, and the box office keeps declining to cooperate: Amazon, Lionsgate, Focus and A24 have all placed pictures in this year’s top 10. A market that must be gerrymandered around “Obsession” is not a market. It is a theory with an exemption policy.
On July 20, Judge Araceli Martínez-Olguín paused the deal with a temporary restraining order, crediting their evidence on wide-release distribution. Then, last week, Paramount agreed not to close at all until five days after a trial verdict — or June 1, 2027, whichever comes first — and the injunction hearing came off the calendar. A pause by agreement is not a verdict. Note which market did the work: the states’ own complaint puts the merged company’s wide-release share around 27% — shy of the 30% that antitrust doctrine long treats as presumptively illegal. The scarier numbers live in the “blockbuster” market — the one that only works if “Obsession” doesn’t count.
All of this second-guesses the Justice Department’s Antitrust Division, which vetted the deal for eight months and 2 million documents before closing its file in June with no conditions — and a finding that it is likely to increase competition. The 12 attorneys general, all Democrats, sued anyway a month later.
Their complaint describes theatrical as “a big business, and it is thriving.” Nobody in the movie business talks that way. Moviegoers bought some 770 million tickets last year — half as many as at the 2002 peak, and more than a third fewer than in 2019 — with an average admission north of $13 doing the work that attendance no longer does.
The employment record is no healthier. Los Angeles County shed some 42,000 motion-picture jobs from 2022 through 2024; on-location shooting has fallen by more than 40% over the same stretch; production employment is scraping a 30-year low. All of it predates this merger. The status quo the states want preserved produced those numbers.
Set against that record, the deal’s commitments read like the industry’s standing wish list: both studios still making movies, at least 30 wide theatrical releases a year — 15 apiece — and a guaranteed 45-day exclusive theatrical window. Since Skydance took control last August, Paramount’s annual slate has climbed from eight pictures to 15.
Economists have run the numbers. Jeff Ferry of the California Policy Center prices the commitments at about $1 billion in added production outlays each year — roughly 6,600 jobs on sets and 40,000 economywide. A University of Wisconsin-Whitewater team puts the national effect near $20 billion annually and north of 90,000 jobs.
The Teamsters call the deal a “direct threat to film and television workers nationwide,” and one producer’s prediction of 10,000 lost jobs is backed by no study or model. But neither a picket line nor a court order can make a shrinking company greenlight pictures. Warner Bros. Discovery’s top line has contracted every year since 2023 — $41.3 billion then, $37.3 billion now — with a $9.1 billion write-down along the way. Blocking the sale does not protect workers from that trajectory. It locks them into it.
The deal now sits frozen pending a trial that could run into 2027. If the states win, the commitments die with it: no 30-film floor, no 45-day window, none of the jobs in those studies — all sacrificed to a “blockbuster market” that a $750,000 horror movie just crashed. Hollywood’s problem is not that too few companies make movies. It is that too few movies get made. A town that runs on greenlights should think hard before it cheers for a red light.
Ashley Baker is the executive director of the Committee for Justice. X: @andashleysays