Well, it wouldn't be a "mega monopoly", it would just be one of 4 major studios instead of 5.
One company suddenly increasing in size to the tune of 7 figures is not just "4 major studios instead of 5". One company is literally buying an insane size of the market along with a lot of IP.
The market is far better served letting Warner go bankrupt and having the company divided and the 4 major studios equally getting to bid for parts of the business.
We don't want this to go like the airlines went. In that case, a merger was blocked to "preserve competition", but the result was Spirit went out of business, taking a competitor out of the market anyway
The end result of this is that Spirits time slots and assets are bought by a variety of airlines. Yes that's exactly where we want to go. You're not served by pretending there is competition simply because one company has two different coats of paint on their planes while they overnight massively increase the amount of market coverage, and dominance in the industry. This does not benefit the consumer.
And yeah it sounds bad, company goes under, jobs lost... I suppose millions of Americans just decided to no longer fly now? Except that's never been the case with any airline going bankrupt in the history of the airline industry. In reality consumers still fly, companies still want to serve consumers. Airports are all effectively running at full slot capacity. The end result is those people who lost their jobs get jobs at various competitors who fill the whole. The planes and assets get bought and reused by various competitors. The flight slots get taken up by various competitors.
You may see the key word there: "various". From a market point of view and from a consumer competition point of view, having one company go out of business is MASSIVELY preferable to having the company "saved" by being bought by another company. The former process preserves competition, the latter creates consolidation.
Industries in trouble need to be blocked from mergers. Allowing them can have worse outcome than market competition.