Theater Chains vs. State Lawyers: A Hollywood Merger Tug-of-War
California Attorney General Rob Bonta walked out of a scheduled meeting with Paramount on 24 August 2026 after details leaked, accusing the studio of "playing games" — the latest friction point in a fight over the largest proposed merger in Hollywood history (Variety).
At stake is Paramount's $110 billion acquisition of Warner Bros. Discovery, a deal Bonta and 11 other state attorneys general sued to block on 13 July 2026. Their 38-page complaint, filed as Case 4:26-cv-07116, alleges the merger violates Section 7 of the Clayton Act — the federal statute that bars mergers likely to "substantially lessen competition" (California OAG). The states argue that combining two of the five largest film distributors would weaken cinema chains' leverage in negotiating how long movies play in theatres and how ticket revenue is split.
An emergency court order secured later in July has kept the deal on hold until 2027 or until a court rules (Facebook / NY AG).
But the theatre chains themselves want the lawsuit settled. AMC, Regal, and Cinemark — the three largest cinema circuits in the United States — have urged California to reach an agreement with Paramount rather than litigate the deal to exhaustion (AOL). Cinema United, the trade body formerly known as the National Association of Theatre Owners until its 2025 rebrand, sent a letter calling for "enforceable safeguards" on access to films and restating worries about marketing budgets and rental terms — the fees studios charge theatres to play their movies (Variety).
AMC CEO Adam Aron has argued since April 2026 that a stronger combined studio would release more films, which is good for theatres. Cinemark CEO Sean Gamble was more guarded on a May investor call: Paramount's David Ellison was "saying all the right things," but Gamble wanted firm commitments, not reassurances (Variety).
Ellison has tried to provide them. He pledged in writing to release 30 films a year for three years and to give each a 45-day theatrical window — the minimum period a film plays in cinemas before moving to streaming or home video. Paramount said it would extend the same written guarantee to other exhibitors (Variety).
Bonta has called those concessions insufficient. He told reporters on 19 August that it would take "robust" concessions from Ellison to settle the case (AOL).
The states' investigation has been thorough. Before filing suit, the attorneys general subpoenaed documents from both Regal and AMC, seeking the theatre chains' internal records on how they negotiate with studios (Variety).
Bonta's interest in the deal stretches back to February 2026, when he issued a statement on proposed Warner Bros. acquisitions by either Paramount or Netflix and launched an initial antitrust review (California OAG).
The dispute puts theatre operators and state regulators in an unusual position: both want a healthy theatrical market, but they disagree on whether this merger helps or harms it. The chains see a bigger studio with more films. The attorneys general see one fewer competitor in an industry that already has too few.
For now, the deal sits frozen — and the two sides cannot even agree on how to talk about it.
