Importantly, Warner must suspend contact for at least two weeks, the judge said
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A federal judge on Monday ordered Paramount Skydance and Warner Bros. Discovery has put its $81 billion merger on hold for at least two weeks, allowing states challenging the deal more time to make their case in court.
A dozen states, led by California, sued to block Paramount’s pending acquisition of Warner last week – saying such a combination would “stifle competition” in Hollywood and lead to fewer choices for consumers, especially moviegoers and cable customers across the US.
Top state prosecutors have asked Warner and Paramount not to block the deal until a court has had time to “fully examine” their claims. And when the companies refused, they filed for a temporary restraining order – which is what District Judge Araceli Martínez-Olguín granted on Monday.
That opens the door to possible injunctions by states that also want to effectively block the deal.
“This is the first important win in our case to ensure this couple never sees the light of day,” California Attorney General Rob Bonta said in a statement following Monday’s order. “History tells us what happens when a few people have too much power over the main markets in American life: fewer opportunities for more people, worse products and services for all.”
The Warner-Paramount tie-up will include two of the last five wills in Hollywood – and dozens of TV networks, titles that fill the libraries of broadcast and news operations.
That it will include Warner’s HBO Max, a fan favorite Harry Potter again even CNN comes under the same roof of CBS owned by Paramount, movies like Top shot and Paramount+ streaming service.
Paramount did not immediately comment on Monday’s order. But the company, which was bought by Skydance last year, has vowed to “vigorously defend” its acquisition of Warner. Paramount previously called the states’ complaint “false in fact and law,” insisting the merger would strengthen competition against larger entertainment rivals. And it highlighted the regulatory spotlight the deal has received elsewhere, including the administration of US President Donald Trump last month.
The temporary restraining order granted on Monday stops the deal from going ahead for at least 14 days, although the temporary suspension can be extended for up to 28 days. The court has set August 3 as the date for hearing the states’ petition, although that schedule may be postponed.
Many were looking for Paramount and Warner to try to close their deal as early as this week. And before Monday’s decision, the companies proposed to close the first hearing at the end of August, leaving time to make a possible appeal on September 30 – a date that is at the top of Paramount’s mind because it promises to pay shareholders additional “marking money” compensation of about $ 7 million US per day if there is no agreement.
But states called such a timeline unprecedented and unfair. They believe that the most important money may have to come in after September 30 was the risk of a decision that the company took alone – and they argued at the trial on Friday that the start of the trial in April 2027 would allow enough time to find and present the relevant evidence.
Including billions of dollars in debt, Paramount’s proposed purchase of Warner is currently valued at approximately $111 billion based on outstanding shares.
Beyond California, states joining Monday’s lawsuit include Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington. And others – including Writers Guild of America – they are also suing to block the meeting.
