A group of US states could file suits next week to block Paramount’s acquistion of Warner Bros Discovery (WBD). The legal threat comes weeks after the Justice Department cleared the merger.

The states are concerned the combination would harm competition, according to Reuters. Advocacy groups and some state regulators have warned that subscription prices for streaming services could rise, and that the merged company might cut jobs and offer a narrower range of films, news and other content.

The transaction would merge two of Hollywood’s four major studios, and its scale is part of what has drawn regulators’ attention. Under the agreed terms, Paramount is paying $110 billion including debt.

California Attorney General Rob Bonta is investigating whether the transaction violates US laws against mergers that harm competition. Bonta’s office declined to comment, and Paramount did not respond to Reuters.

A court challenge would carry significant costs for Paramount, which is expected to shoulder around $80 billion in debt once the transaction closes. Any delay would only add to that burden.

Discovery shareholders have a 25-cent-per-share ‘ticking fee’ if the deal does not close before October, amounting to roughly $650 million in cash each quarter. The clause gives both sides a strong incentive to complete the tie-up quickly.

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Tags: paramount, usa, WBD