Stay up to date with our Up First newsletter, sent every weekday morning.

A dozen states, led by California, are suing to block Paramount from buying Warner Bros. Discovery in a Hollywood mega-merger that would unite some of the nation’s largest movie studios, television newsrooms, and other entertainment properties.

“The unlawful merger of these two entertainment behemoths 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 U.S.,” California Attorney General Rob Bonta said in a statement announcing the suit, which was filed in federal court in California’s Northern District.

The deal would give a wealthy family that has taken pains to show its allegiance to President Trump the effective ownership of the companies’ competing movie studios, streamers (Paramount+ and HBO Max), sports programming (CBS Sports and Turner Sports) and news divisions (CBS News and CNN) as well as a suite of cable channels, such as Comedy Central, VH1, MTV, TNT, TBS, HGTV and Discovery, among others.

The president has repeatedly praised Larry and David Ellison, the digital titan and his son who are the controlling owners of Paramount. And he has publicly urged the sale of Warner’s CNN to new owners.

“We’re trying to have CNN go in a normal path,” Trump told CNN anchor Jake Tapper yesterday at the end of an interview about the late Sen. Lindsey Graham.

In his statement Monday, Bonta said, “With this lawsuit, California and our sister states are fighting for free and fair markets, not rigged markets. America has no kings in government or our economy.”

Paramount is inviting in sovereign wealth funds from Saudi Arabia, Qatar and the United Arab Emirates as major investors who will forego voting rights. The financing proposal also envisions that the company will take on $80 billion in new debt. That will assuredly trigger major cuts throughout the combined company. Warner dramatically reduced its own debt after slashing budgets, but is still tens of billions of dollars in the red, which helped set the stage for Paramount’s unsolicited bid.

Bonta sees “red flags”

In late June, Bonta told MS NOW’s Jacob Sobroff that the deal presented “red flags in the air everywhere.” The acquisition is valued at approximately $111 billion, including debt and major (though nonvoting) investment stakes from Saudi and other sovereign wealth funds. Bonta has armed his office for potentially costly legal battles by hiring a new batch of lawyers, including some who left the U.S. Justice Department after Trump took office a second time. He also secured new funds from the state legislature specifically for antitrust enforcement.