Paramount to Face Legal Challenge From States on Warner Deal (2)

The top lawyers for several states are drafting a legal challenge to Paramount Skydance Corp.’s $110 billion deal to buy Warner Bros. Discovery Inc., laying the groundwork for an antitrust suit over the Hollywood mega-deal.

After investigating for months whether the transaction would harm competition, senior officials in about 10 states have begun drafting a complaint and discussing logistics for filing a potential lawsuit as soon as this month to stop the merger, according to people familiar with the matter. California, which is home to the entertainment industry, has been leading the effort.

No final decisions have been ...