A federal judge has issued a ruling to temporarily stop the $81 billion US merger between Paramount Skydance and Warner Bros. Discovery for at least two weeks. This pause allows states opposing the deal more time to present their case in court. The lawsuit, spearheaded by California and joined by eleven other states, aims to prevent Paramount’s acquisition of Warner, arguing that the merger would stifle competition in the entertainment industry, limiting choices for consumers nationwide.
Following the companies’ refusal to delay the transaction until the court fully evaluates the claims, the states sought a temporary restraining order. District Judge Araceli Martínez-Olguín granted this order on Monday, potentially paving the way for a preliminary injunction to block the merger permanently.
California Attorney General Rob Bonta hailed the court’s decision as a crucial initial victory in their efforts to prevent the megamerger from proceeding. The proposed merger would consolidate two major Hollywood studios, Warner and Paramount, along with various TV networks, popular titles like “Harry Potter,” and streaming services like HBO Max and Paramount+ under one umbrella.
While Paramount has vowed to vigorously defend the acquisition, citing regulatory approvals received in the past, the temporary restraining order now puts a hold on the deal for at least 14 days. A hearing on the states’ preliminary injunction request is scheduled for August 3, with a possible extension up to 28 days.
The states contest the timeline proposed by Paramount and Warner, arguing that any financial consequences arising from a delayed deal are the companies’ own risk. The total value of Paramount’s bid for Warner, including debt, stands at nearly $111 billion US. In addition to California, other states involved in the lawsuit include Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington, with support from entities like the Writers Guild of America.