Twelve US states have filed a lawsuit to block Paramount’s attempted $110bn acquisition of Warner Bros Discovery, the parent company of CNN, amid allegations that the move would undermine competition across film and cable TV.

The lawsuit, led by the state of California, alleges that the merger would cause “substantial harm on movie theaters, basic cable distributors and, ultimately, audiences nationwide”, according to a statement released by the office of California Attorney General Rob Bonta.

The lawsuit also includes the attorneys general of Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington.

If the merger goes through, the combined company would control 27 percent of the nation’s basic cable TV licensing, and 75 percent of wide-release theatrical film distribution.

Bonta’s office said that without competition, the merger could drive up costs for consumers.

“With this lawsuit, California and our sister states are fighting for free and fair markets, not rigged markets,” Bonta said in a statement, adding that the merger “would lead to higher prices, lower quality, and less content for film and television, harming movie theaters, basic cable distributors, and ultimately, audiences on every sofa and movie theater seat in the US”.

“With less leverage after the merger, cable television distributors and the subscribers they serve will likely face higher prices and reduced investment in content,” the 38-page complaint said.

The complaint comes amid reports from the outlet Semafor that Paramount CEO David Ellison is considering moving the studio’s headquarters out of California as tensions bubble over.

A ruling on the case could take months. The states have asked Paramount to delay closing the deal until legal proceedings conclude. The states said that if the Ellison-led media giant does not comply, they will seek a court order requiring it to do so.

This comes amid reports that regulators in the United Kingdom might also intervene in the deal.

Paramount has already committed to paying $650m in fees to Warner Bros Discovery shareholders each quarter if the deal does not close before October, and delays could shift the deal’s financing.

While Paramount did not comment on the action today, the company has previously said that any lawsuit would be politically motivated.  David Ellison is the son of Oracle co-founder Larry Ellison, a key ally of US President Donald Trump.

“If allowed to go through, this merger would raise prices, reduce consumer choice, and cost many Americans their jobs while enriching billionaires and C-suite executives,” Washington State Attorney General Nick Brown said in a statement on the heels of the announcement.

The deal, which cleared Department of Justice regulatory hurdles last month, has been met with backlash from actors, producers, and directors. In April, thousands of renowned figures, including actors Robert De Niro, Ted Danson, and director JJ Abrams, called on regulators to block the merger.

“We are deeply concerned by indications of support for this merger that prioritize the interests of a small group of powerful stakeholders over the broader public good. The integrity, independence, and diversity of our industry would be grievously compromised,” they said in an open letter.

Paramount has pushed back on that allegation, claiming that it would produce more movies rather than fewer, with Ellison saying it would produce 30 movies a year.

The looming merger is also weighing on CNN, which Warner Bros Discovery owns, amid concerns that the merger could lead to editorial shifts comparable to Ellison’s takeover of CBS News, where he has subsequently installed Bari Weiss, a right-leaning opinion journalist with no previous TV experience, to lead the network, raising concerns that the network is trying to appease the Trump administration.

Among the concerns raised are instances of the spiking of stories critical of the Trump administration and hiring a prior Trump appointee as an ombudsman to oversee allegations of bias. The changes have subsequently led to top network talent leaving CBS News, including broadcast journalist Scott Pelley, who accused Weiss of “murdering” 60 Minutes, the network’s long-standing news magazine programme. In June, ratings for CBS Mornings fell to a record low for the month.

Staff are concerned that Weiss may move over to reshape CNN. Broadcast journalist Anderson Cooper reportedly said he would exit CNN if Weiss were to join the network, and this comes as legal affairs correspondent Paula Reid is moving to MS Now.