A federal judge has issued a temporary restraining order on Monday, instructing Paramount Skydance and Warner Bros. Discovery to pause their $81 billion US merger for a minimum of two weeks. This pause allows states opposing the merger more time to pursue their case in court.
Led by California, twelve states filed a lawsuit last week to block Paramount’s acquisition of Warner, arguing that the merger would stifle competition in Hollywood and limit choices for consumers, especially moviegoers and cable subscribers nationwide.
The states’ attorneys urged Warner and Paramount to delay finalizing the deal until the court could fully assess their concerns. When the companies declined, the states sought a temporary restraining order, which was granted by District Judge Araceli MartÃnez-OlguÃn on Monday. This ruling paves the way for a potential preliminary injunction to obstruct the merger.
California Attorney General Rob Bonta expressed satisfaction with the court’s decision, emphasizing the importance of preventing the merger from proceeding. He warned of the negative consequences that concentrated market power could have on consumers’ access to diverse products and services.
A merger between Warner and Paramount would unite two of the last five major studios in Hollywood, along with various TV networks, streaming content, and news outlets. This consolidation would bring together Warner’s assets like HBO Max and popular franchises such as Harry Potter under the same umbrella as Paramount’s properties like Top Gun and Paramount+ streaming platform.
Paramount has not issued a response to the court order yet. Despite facing opposition, the company, now owned by Skydance, remains committed to defending its acquisition of Warner. Paramount contends that the merger would enhance competition against larger entertainment competitors and highlights previous regulatory approvals, including from the Trump administration.
The temporary restraining order places a hold on the merger for at least two weeks, extendable up to 28 days. A hearing on the states’ request for a preliminary injunction is scheduled for August 3, with the possibility of delays in the proceedings.
The states have criticized the proposed timeline for closing the deal as unfair. They argue that any potential financial penalties Paramount may face for not meeting the September 30 deadline are a result of the company’s own decisions. The states advocate for a trial starting in April 2027 to allow sufficient time for evidence gathering and legal proceedings.
The estimated value of Paramount’s acquisition of Warner, including significant debt, stands at around $111 billion US. Apart from California, other states involved in the lawsuit are Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington. Additionally, the Writers Guild of America is also challenging the merger.