A federal judge on Monday ordered Paramount and Warner Bros Discovery to halt their $81bn merger for at least two weeks, granting a temporary restraining order sought by 12 US states that are challenging the deal in court. District Judge Araceli Martínez-Olguín issued the pause, allowing the states more time to present their case against the transaction.
States Sue to Block Merger
Led by California, the coalition of states filed a lawsuit last week to block Paramount's buyout of Warner, arguing that the combination would “extinguish competition” in Hollywood and reduce choices for consumers, especially moviegoers and cable subscribers. The states' attorneys general had urged the companies not to close the deal until a full court evaluation, and when they refused, sought the restraining order.
Legal Victory for Plaintiffs
“This is a critical first win in our case to ensure this megamerger never sees the light of day,” California Attorney General Rob Bonta said in a statement. “History tells the tale of what happens when a few people have great power over markets that are central to Americans’ lives: fewer opportunities for more people, worse products and services for all people.”
Impact on Hollywood Landscape
A Warner-Paramount merger would unite two of the five remaining legacy studios in Hollywood, combining assets such as Warner's HBO Max, the Harry Potter franchise, and CNN with Paramount's CBS, Top Gun movies, and Paramount+ streaming service. The deal has already received regulatory approval from the Trump administration last month, but the states' challenge could derail it.
Paramount, which was acquired by Skydance last year, has vowed to “vigorously defend” the acquisition, calling the states' complaint “wrong on both the facts and the law.” The company argues the merger would strengthen competition against larger entertainment rivals.
Next Steps
The temporary restraining order halts the deal for at least 14 days, with a possible extension to 28 days. The court scheduled a hearing on the states' preliminary injunction motion for 3 August, though that date may be pushed back. Paramount did not immediately comment on Monday's order.
