A federal judge in California has temporarily halted the proposed $110 billion merger between Paramount Skydance and Warner Bros. Discovery, barring the companies from completing the transaction for 14 days while a lawsuit challenging the deal proceeds.
The temporary restraining order, issued on Monday, prevents the merger from closing until at least August 3, when the court is scheduled to hear arguments on a preliminary injunction sought by 12 states led by California. The states argue that the merger could substantially reduce competition in the media and entertainment industry.
In her ruling, the judge said the states had raised “serious questions” about whether the transaction could violate antitrust laws, adding that “the balance of equities and public interest tip sharply in favor of the Plaintiff States.”
The lawsuit, filed last week by California and 11 other Democratic-led states, challenges the approval granted to the merger by the Trump administration’s Justice Department last month. The states contend that combining Paramount Skydance and Warner Bros. Discovery would give the new company significant control over theatrical film distribution and basic cable channel licensing.
California Attorney General Rob Bonta described the court’s decision as “a critical first win in our case to ensure this megamerger never sees the light of day.”
Responding to the ruling, a Paramount spokesperson welcomed the court’s decision to maintain the current situation while the legal challenge continues.
“We’re grateful for the Court’s swift order,” the spokesperson said, adding that it “preserves the status quo while the Court considers the antitrust issues presented.”
According to the states’ complaint, the merged company would control about 27 percent of wide-release theatrical film distribution, alongside a similar share of the basic cable channel licensing market. They argue that the deal could result in higher prices, reduced consumer choice and less content.
“California and our sister states are fighting for free and fair markets, not rigged markets. America has no kings in government or our economy,” Bonta said.
The proposed merger has also drawn political attention, with President Donald Trump publicly indicating he would weigh in on the transaction as uncertainty surrounds the future of CNN, one of the assets that would fall under the combined company.
The merged media group would include major entertainment and news assets such as CNN, Warner Bros. Pictures and the HBO Max streaming service.
Paramount, however, rejected the allegations made by the states, maintaining that the transaction would strengthen competition across the media sector.
“This merger is lawful, pro-competitive, and will benefit consumers, creators, workers, and the entertainment industry,” the Paramount spokesperson said.
“We will continue to vigorously defend the transaction and will look forward to the hearings on the substance of the State AGs’ action.”
The states participating in the lawsuit are Arizona, California, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington.
Ademide Adebayo
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