California Attorney General Rob Bonta's antitrust challenge to the proposed Paramount-Warner Bros. merger just lost its three biggest allies. Cinemark became the latest major theater chain to withdraw support for Bonta's legal case, joining AMC and Regal in abandoning the fight against the $8.5 billion deal that would create a content and distribution powerhouse.
The exodus of theater chains severely weakens Bonta's position heading into spring litigation. His original argument rested partly on claims that the merger would harm theatrical exhibition and cable providers. Without the support of chains representing the vast majority of American multiplexes, proving consumer harm becomes exponentially harder. Theater chains are the natural stakeholders with standing to testify about competitive injury.
Bonta filed his antitrust complaint in July, successfully obtaining an injunction that delayed the merger beyond its original closing deadline. The restraining order handed him a tactical victory. But that momentum evaporates when the companies you claimed to protect begin siding with the defendant.
Why did the chains flip? Paramount and Warner Bros. apparently negotiated agreements favorable to theaters. Both studios likely offered concessions on theatrical windows, licensing terms, or distribution arrangements. When a merger defendant can flip the supposed victims into supporters, it transforms litigation optics. Judges notice when the allegedly harmed parties no longer object.
AMC, Regal, and Cinemark control roughly 75 percent of U.S. box office revenue. Their collective abandonment signals that theater operators either believe the merger carries minimal downside or view potential benefits as outweighing risks. Some may have negotiated directly with the merged entity for preferential treatment. Others might have simply calculated that fighting an $8.5 billion transaction backed by two Hollywood studios exceeds their litigation appetite.
Bonta's case now rests primarily on broader antitrust theories about vertical integration and content distribution. He'll need to prove the merger harms consumers generally, not just specific theater operators. That's a heavier lift. The Federal Trade Commission's recent aggressive posture toward entertainment consolidation provides some precedent, but individual state attorneys general pursuing solo challenges face institutional disadvantages.
The California attorney general will need to demonstrate that combining Paramount's content library and theatrical release schedule with Warner Bros. Discovery's HBO Max streaming service and cable networks creates anticompetitive leverage. He'll argue the merged company could force unfavorable terms on independent theaters, cable providers, and streaming competitors. Without theater chains testifying as victims, he relies on economic theory and economic experts.
Paramount and Warner Bros. Discovery have financial incentives to settle with a state attorney general rather than litigate through trial. A settlement might include divestitures, behavioral remedies, or licensing commitments. But Bonta's weakening position reduces his leverage. The studios can credibly argue they've already addressed theater concerns through negotiated agreements with major chains.
Spring litigation will reveal whether Bonta can sustain his antitrust argument absent theater chain support. His injunction victory in July looked like momentum. The withdrawal of all three largest chains looks like retreat. The merger remains delayed, but the legal battle's trajectory has shifted decidedly toward the defendants.