The head of the largest US theatre-owners' group has fired a fresh broadside at the proposed $110 billion merger of Paramount Skydance and Warner Bros. Discovery, backing a multistate lawsuit that has already put the deal on ice.

Michael O'Leary, CEO of Cinema United — the trade body representing movie theatre operators across the United States — sent a letter to member exhibitors on Wednesday reiterating the organisation's opposition to the tie-up and voicing support for litigation filed by a coalition of state Attorneys General, according to Variety. That coalition, led by California's Rob Bonta and including New York's Letitia James, sued on or before July 13 to block the merger, arguing it would hurt competition and cost thousands of jobs. A judge has since granted a temporary restraining order, halting the deal for months.

O'Leary wrote that he had provided a sworn declaration spelling out exhibitors' concerns in support of the states' motion for that restraining order. His central worry: a combined Paramount-Warner Bros. would carry roughly $80 billion in debt, a load he argued could choke film production. He pointed to Disney's 2019 acquisition of 21st Century Fox as a cautionary tale, noting that the number of films produced shrank considerably after that consolidation.

The figures give the argument weight. In filings to both the House Judiciary Subcommittee and the US Senate earlier this year, Cinema United warned that a merged Paramount-Warner Bros. would concentrate as much as 40% of annual domestic box office — the United States and Canada combined — in a single company's hands (Cinema United). The organisation first voiced these concerns publicly in a February 27 post on its website and pressed the case again in an April letter to state Attorneys General reported by Deadline.

The relationship between Cinema United and Paramount has grown testy. O'Leary said the group's executive board asked to meet Paramount leadership at CinemaCon, the industry's annual Las Vegas convention, and the invitation was declined. He said he then met with Paramount in Washington, D.C. in June to outline Cinema United's reservations. On July 1, after what the organisation believed were constructive conversations, it sent Paramount a comprehensive list of concerns. It has not heard back since.

Paramount disputes that account. A company spokesperson told Variety that Paramount had provided enforceable commitments, but that Cinema United's counsel then introduced new demands unrelated to the merger. The spokesperson also noted that Cinema United uses the same law firm that represents multiple clients opposed to the deal.

The $110 billion merger, first pursued by Paramount Skydance as part of a broader consolidation push, now faces its sharpest test yet: a courtroom, a coalition of a dozen states, and an exhibitor lobby that refuses to back down.