A person close to Democratic New Jersey Gov. Mikie Sherrill criticized state Attorney General Jennifer Davenport’s decision to join a multistate lawsuit seeking to block Paramount Skydance’s proposed $110 billion acquisition of Warner Bros. Discovery, telling the Daily Caller News Foundation that the governor’s team was not warned in advance.
“We didn’t have a heads up,” the source told the DCNF.
The person questioned why New Jersey would enter the case while the state is trying to attract entertainment investment and jobs from both companies.
“Did we really need to get involved when we’re negotiating such great things for our taxpayers with Paramount and Warner Brothers?” the source told the outlet.
New Jersey’s Film Stakes
The dispute lands as New Jersey has been trying to build itself into a larger production hub. The New Jersey Economic Development Authority reported that 556 productions filmed in the state in 2024, generating a record $833 million in spending and hiring more than 30,000 crew members.
The state has also extended its Film and Digital Media Tax Credit Program through 2049 in an effort to attract studios and long-term entertainment investment.
The source close to Sherrill argued that the litigation appears weak if regulators have already reviewed and approved the transaction.
“If every single regulator has approved this … it doesn’t look like the most compelling case,” the person told the DCNF.
Other Democrats Urge Withdrawal
Several New Jersey Democrats have also pushed back on the state’s involvement. State Sens. Raj Mukherji, Brian Stack and Angela McKnight, Hudson County Executive Craig Guy and other Democratic officials urged Davenport to withdraw New Jersey from the litigation.
They argued the state should have an “exceptionally compelling reason” to spend taxpayer money on a lawsuit that they said could threaten investment in New Jersey.
Davenport joined California Attorney General Rob Bonta and attorneys general from 10 other states in July in suing to stop the merger. The coalition argues the deal would reduce competition by combining two major movie studios and basic cable companies, potentially leading to higher prices and fewer choices for consumers.
Davenport’s office declined to comment to the DCNF, citing ongoing litigation.
Federal Review Cleared the Deal
The Justice Department cleared the merger after an eight-month investigation, according to the source material. Federal officials reviewed more than 2 million documents from more than 80 custodians.
State attorneys general participated in that investigation, including depositions, after the companies waived confidentiality restrictions so federal and state investigators could share information.
The DOJ concluded the transaction was “not likely to result in harm to competition or American consumers” in streaming, linear television or theatrical film production and distribution.
Ashley Baker, executive director of the Committee for Justice, told the DCNF that the federal review creates a challenge for the states because they had access to much of the same evidence as federal antitrust officials.
“The states were not outsiders to the federal review,” Baker said. “The parties waived confidentiality, and the state attorneys general participated in the Antitrust Division’s investigation — they attended and participated in the depositions.”
“They had access to the same two million documents from more than eighty custodians,” Baker continued. “The Division spent eight months on that record and concluded the deal was not likely to harm competition in streaming, linear television, or theatrical release, and closed without conditions.”
Billions at Issue as the Case Proceeds
The states’ complaint says the combined company would control roughly 27% of wide-release theatrical distribution and a similar share of basic cable. Baker argued those figures do not prove consumer harm by themselves.
“The strongest thing the states have is arithmetic, not evidence,” Baker told the DCNF. “But a share is not a harm.”
The DOJ also questioned relying strictly on historical market shares when it closed its investigation, citing Supreme Court precedent.
Baker warned that the lawsuit could impose costs even if the states do not ultimately win.
“The process has become the penalty,” Baker said. “The state doesn’t need to win at trial to impose consequences. It only needs to wait.”
Paramount has asked a federal judge to require the 12 states challenging the merger and the Writers Guild of America to post a $1.88 billion bond to cover potential losses tied to delaying the transaction.
The company said it would begin paying about $7 million per day in “ticking fees” if the deal did not close by Sept. 30 and could incur roughly $1.3 billion in such fees by the end of trial. Reuters reported that a hearing on the bond request was scheduled for Sept. 24.
The person close to Sherrill told the DCNF that people involved in the dispute increasingly expect the litigation to end in a settlement.
“Joining that California charade,” the source said, “doesn’t speak for anybody else in the state.”
