Four States in America are set to disrupt billionaire Larry Ellison and his son, David Ellison's plan to create Hollywood colossus by merging ...

Oracle founder Larry Ellison and his son, David Ellison, may face a major legal obstacle in their plan to build a larger Hollywood media company. Four American states are reportedly preparing to challenge David Ellison-led Paramount's proposed $111 billion acquisition of Warner Bros.

Discovery. According to a report by The New York Times (NYT), people familiar with the matter have claimed that California is leading the effort, with New York, Washington and Connecticut expected to join the lawsuit, which could be filed as early as this week.The draft lawsuit argues that the merger would reduce competition in the market for so-called tentpole films, the high-budget blockbusters that account for a significant share of studio revenues.

If filed, the case would become one of the biggest remaining legal hurdles for the transaction after the US Department of Justice decided last month not to challenge the deal.

US states raise antitrust concerns over Paramount-Warner Bros. Discovery deal

According to people briefed on the plans, the lawsuit claims that combining Paramount and Warner Bros. Discovery could reduce competition in parts of the entertainment industry, including blockbuster film production. California Attorney General Rob Bonta has previously said he prefers "structural remedies" to address antitrust concerns, a term that generally refers to the sale or spin-off of parts of a business.

A Paramount spokesperson said the company was prepared to address "legitimate antitrust issues," adding that its merger with Warner Bros. Discovery "raises no such concerns.""We are confident the facts and the law support this transaction, and we will continue to defend it vigorously," the spokesperson said.Paramount has said it still expects to complete the acquisition during the third quarter of the year. Under the merger agreement, the company has agreed to pay Warner Bros.

Discovery shareholders $650 million in cash for each quarter the deal remains unfinished, beginning in October.

Why Larry Ellison and David Ellison's expansion plan is facing legal challenge

The proposed merger would significantly expand the media holdings of Larry Ellison and David Ellison. David Ellison acquired Paramount last year before agreeing in February to purchase Warner Bros. Discovery. The combined business would include two major film studios, multiple streaming platforms, and news networks such as CNN and CBS News.The Justice Department said last month it would not oppose the acquisition, stating that the "film and television industry is highly dynamic, and the proposed transaction is not likely to harm competition or American consumers."Internationally, the deal has already secured approval in more than 20 countries and regions, including China and Australia, while reviews remain ongoing in some markets such as the United Kingdom.The merger has also drawn opposition from parts of the entertainment industry. In April, more than 1,000 writers, actors and directors signed a letter opposing the deal, arguing that it could further reduce spending on film and television projects.According to people familiar with the discussions, Paramount has proposed measures to address California's concerns, including a $50 million fund to train union workers affected by new technologies such as artificial intelligence. The company has also argued that combining the businesses would help it compete more effectively with major streaming companies by reducing costs and allowing greater investment in content.