A federal judge has ordered a temporary halt to the $81 billion merger between Paramount and Warner Bros. Discovery. This decision, announced on Monday, allows further time for states challenging the merger to present their case in court. Twelve states have raised concerns that this merger would reduce competition and limit choices for U.S. moviegoers and cable customers.
California, leading the opposition, claims the merger would concentrate power, harming consumer choices. The states’ attorneys general urged the companies to delay the merger until a complete court evaluation is possible. However, when Paramount and Warner Bros. refused, a temporary restraining order was filed, which District Judge Araceli Martínez-Olguín granted.
“This is a critical first win in our case to ensure this megamerger never sees the light of day,” said California Attorney General Rob Bonta.
The merger involves integrating major media assets, including Warner’s HBO Max and Paramount’s CBS, along with renowned titles like “Harry Potter” and “Top Gun”. The companies argue the merger will boost competition against larger rivals and highlight previous regulatory approvals. The restraining order stops the deal for at least two weeks, with a possible extension to 28 days.
A hearing is set for August 3 regarding the states’ request for a preliminary injunction, but this could be delayed. Paramount is under pressure to close the deal by September 30 to avoid paying nearly $7 million daily to shareholders. Critics, including the states, argue this timeline is unfair and unprecedented.
The proposed merger, including debt, is valued at almost $111 billion. Besides California, other states involved in the lawsuit include Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington. The Writers Guild of America is also seeking to block the merger.