US judge halts $110 billion Paramount-Warner Bros Discovery merger
The ruling pauses the proposed acquisition, which aimed to combine major streaming and television assets, citing likely violations of competition laws and potential harm to theatrical distributors and cable operators.
A US federal judge has issued a 14-day temporary restraining order, effectively pausing Paramount Skydance’s proposed $110 billion acquisition of Warner Bros. Discovery. The injunction was granted by US District Judge Araceli Martínez-Olguín following legal arguments heard last week, marking a significant regulatory hurdle for one of the largest media consolidation deals in recent history.
The legal intervention stems from a lawsuit filed by a coalition of 12 state attorneys general, led by California Attorney General Rob Bonta. The coalition argues that the merger would substantially lessen competition in wide release theatrical film distribution, top-grossing theatrical distribution, and basic cable licensing. They contend that the combined entity would negatively impact movie theatres, basic cable distributors, and audiences by reducing market competition.
Judge Martínez-Olguín modified the states’ initial request for a 28-day pause, implementing the shorter 14-day order instead. In her ruling, the judge noted that based on the new company’s projected market share, the court was persuaded the merger is likely to violate antitrust laws. She determined that the states had demonstrated that irreparable harm could occur without immediate judicial intervention.
The proposed transaction aims to transform Paramount into a formidable competitor to streaming giants such as Netflix and Disney. The deal would combine the Paramount+ and HBO Max streaming platforms and merge extensive television networks, including CBS, MTV, CNN, and HBO. Paramount CEO David Ellison had previously stated in May that the transaction was on track to close by September, a timeline now thrown into uncertainty by the court’s decision.
Attorney General Bonta described the ruling as a critical first win in the effort to block the megamerger. He stated that the lawsuit is fighting for a free and fair market and a thriving film and television industry that serves creatives and audiences alike. The coalition has indicated it could seek another pause after the initial 14-day period expires, potentially further delaying the deal.
The acquisition has faced scrutiny from filmmakers, actors, and industry professionals who argue that the deal would reduce competition and further consolidate the US media industry. As of the time of reporting, neither Paramount nor Warner Bros. Discovery had provided immediate comment on the judge’s order.
