Judge freezes Paramount’s $111B Warner Bros. merger

A federal judge on Monday froze Paramount Skydance's $111 billion acquisition of Warner Bros. Discovery ↗ 0.03%, granting a temporary restraining order that prevents the companies from closing the deal for at least 14 days.

U.S. District Judge Araceli Martínez-Olguín of the Northern District of California issued the order in response to an antitrust lawsuit filed July 13 by a coalition of 12 state attorneys general, led by California AG Rob Bonta. The ruling came days after the judge heard approximately 80 minutes of arguments Friday in Oakland.thedesk+2

"This is a critical first win in our case to ensure this megamerger never sees the light of day," Bonta said in a statement.wxxinews

What the Order Means

The restraining order, which can be extended up to 28 days, blocks the companies from closing or consummating the transaction while the court prepares to consider a longer preliminary injunction. Paramount's owners had been planning to secure control of Warner Bros. Discovery by the end of this week.hollywoodreporter+2

The deal would unite Paramount and Warner Bros. movie and television studios, streamers Paramount+ and HBO Max, the nation's most-watched broadcast outlet CBS with 50 cable channels, and CNN and CBS News under one corporate roof.wxxinews

Financial Stakes and What Comes Next

The timing carries substantial financial consequences. Under the merger agreement, if the deal is not closed by September 30, Paramount faces a "ticking fee" totaling approximately $650 million per quarter — nearly $7 million per day — owed to Warner Bros. Discovery shareholders. Paramount attorney Jeffrey Kessler had offered during Friday's hearing to voluntarily delay completion for 28 days and urged the court to hold preliminary injunction proceedings by the end of August.hollywoodreporter+1

The states' complaint alleges the merger violates Section 7 of the Clayton Act by concentrating too much power in wide-release theatrical distribution, blockbuster films, and basic cable licensing. The combined company would account for approximately 27 percent of the domestic box office and more than 30 percent of large-budget wide-release films, according to the states. Paramount disputes those market calculations, arguing they fail to account for streaming services and deep-pocketed technology companies like Apple ↗ 0.09% and Amazon Amazon.com, Inc. ↘ 0.37% that now release theatrical films.thedesk+2

The merger had already received approval from the U.S. Department of Justice, though a European Union decision remains pending with a provisional deadline of July 22.variety+1