A coalition of US states is reportedly preparing legal action aimed at stopping Paramount Skydance’s proposed A$110 billion acquisition of Warner Bros., setting the stage for what could become one of the largest antitrust battles in the entertainment industry.

According to reports, officials in California and New York are among those examining the deal, with a lawsuit expected to be lodged in the coming weeks. If it proceeds, the case would represent a significant effort by state authorities to take a more aggressive stance on competition law, even as federal regulators are perceived to be adopting a more business-friendly approach.

Aerial view of the Paramount logo on a water tower in Los Angeles, with snowy mountains in the background.

The proposed merger would combine two of Hollywood’s most recognisable media companies, bringing together a vast portfolio of film, television and streaming assets. Critics argue the deal could further concentrate power within the entertainment sector and potentially lead to job losses across the industry.

Paramount has defended the transaction, maintaining that the merger would strengthen competition against major streaming rivals such as Netflix and provide benefits for both consumers and content creators.

Investor reaction has been mixed. Warner Bros. shares fell following reports of the potential legal challenge, while Paramount’s stock also declined.

The acquisition remains under regulatory review, with industry observers closely watching whether state-led opposition can derail one of the biggest media deals in recent years.