A federal judge has issued a ruling instructing Paramount Skydance and Warner Bros. Discovery to pause their $81 billion US merger for a minimum of two weeks. This temporary halt allows states opposing the merger more time to pursue their case in court. Led by California, twelve states filed a lawsuit aiming to stop Paramount’s acquisition of Warner. They argue that the merger would eliminate competition in Hollywood, reducing choices for consumers like moviegoers and cable subscribers nationwide.
The states’ attorneys urged Warner and Paramount to delay finalizing the deal until the court could thoroughly assess their concerns. When the companies declined, the states sought a temporary restraining order, which was granted by District Judge Araceli Martínez-Olguín. This ruling sets the stage for a potential preliminary injunction that the states are seeking to block the merger effectively.
California Attorney General Rob Bonta hailed the court’s decision as a significant initial victory in preventing the “megamerger” from moving forward. He emphasized the dangers of concentrated market power, warning of limited opportunities, inferior products, and services if the merger proceeds.
A merger between Warner and Paramount would combine two of the last five legacy studios in Hollywood, along with various TV networks, streaming titles, and news outlets. Notable assets involved in the deal include Warner’s HBO Max, popular franchises like Harry Potter, and CNN under the same ownership as Paramount’s CBS, which offers content like Top Gun and the Paramount+ streaming platform.
Paramount has yet to comment on the recent court order, but the company, acquired by Skydance last year, has pledged to vigorously defend the Warner acquisition. Paramount refuted the states’ allegations, asserting that the merger would enhance competition against larger rivals in the entertainment industry. The company highlighted regulatory approvals obtained for the deal, including from the previous administration under President Donald Trump.
The temporary restraining order halts the merger process for at least 14 days, with the potential for an extension up to 28 days. A hearing on the states’ motion for a preliminary injunction is scheduled for August 3, subject to possible delays. Concerns were raised about Paramount and Warner rushing to finalize the deal, prompting proposals for an expedited injunction hearing by the end of August to allow for a possible appeal by September 30.
The states criticized the proposed timeline as unfair, arguing that any financial consequences Paramount faces after September 30 are a result of its own decisions. They advocated for a trial starting in April 2027 to ensure adequate time for discovery and presentation of evidence. With debts factored in, Paramount’s acquisition of Warner is valued at nearly $111 billion US based on outstanding shares.
Apart from California, states joining the lawsuit against the merger include Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington. Additional parties, such as the Writers Guild of America, are also pursuing legal action to block the merger.
