Federal Judge Issues Temporary Halt to Paramount-Skydance Acquisition of Warner Bros. Discovery
A U.S. district judge granted a 14-day restraining order on the $110 billion Paramount-Skydance purchase of Warner Bros. Discovery after a coalition of state attorneys general filed an antitrust lawsuit.
U.S. District Judge Araceli Martínez-Olguín in the Northern District of California issued a temporary restraining order on Monday that bars Paramount Global and its partner Skydance Media from completing their proposed acquisition of Warner Bros. Discovery. The order, which will remain in effect for 14 days, follows a lawsuit filed by a coalition of 12 state attorneys general who argue the $110 billion deal would substantially lessen competition in the entertainment market.
The states, led by California Attorney General Rob Bonta, contend that the merger would reduce competition in theatrical film distribution, top-grossing movie releases, and the market for basic-cable channel distribution, violating Section 7 of the Clayton Antitrust Act. Bonta said the merger could result in higher prices and fewer choices for consumers.
Paramount responded that the lawsuit is “wrong on both the facts and the law” and pledged to defend the transaction, noting that it has already received clearance from the U.S. Justice Department and approvals from regulators in other countries.
The judge scheduled a hearing for August 3 on the states’ request for a preliminary injunction, which would keep the deal frozen while the case proceeds. The parties also face separate challenges from the European Union’s antitrust regulators, the U.K. culture secretary, the Writers Guild of America, and a consumer group that filed an antitrust suit over the potential combination of Paramount+ and HBO Max.
If the merger is not completed by September 30, Paramount would be required to pay Warner Bros. shareholders a quarterly “ticking fee” of $0.25 per share, a penalty that could exceed $600 million per quarter.