A federal judge has ordered Paramount and Warner Bros Discovery to pause their $81bn merger for at least two weeks, after 12 US states sued to block the deal on the grounds that it would “extinguish competition” in Hollywood. The temporary restraining order, granted on Monday by district judge Araceli Martínez-Olguín, prevents the transaction from closing while the states’ case proceeds. The states, led by California, filed the lawsuit last week after the companies refused to voluntarily delay the merger until a court could “fully evaluate” their claims. The order could be extended for up to 28 days, and a hearing on the states’ request for a preliminary injunction – which would effectively block the deal – has been set for 3 August, though that date may be pushed back.
“This is a critical first win in our case to ensure this megamerger never sees the light of day,” said Rob Bonta, the California attorney general, in a statement after the ruling. “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.” The merger would combine two of the five remaining legacy studios in Hollywood, bringing together Warner’s HBO Max, the Harry Potter franchise and CNN with Paramount’s CBS network, the Paramount+ streaming service and blockbuster films like Top Gun. The states argue that such a concentration would reduce choices for moviegoers and cable customers across the US.
“Judge orders two-week pause on $81bn Paramount-Warner merger after 12 US states sue to block”
Paramount did not immediately comment on Monday’s order, but the company – which was bought by Skydance last year – has vowed to “vigorously defend” the acquisition. It has called the states’ complaint “wrong on both the facts and the law”, arguing that the merger would actually strengthen competition against larger entertainment rivals. Paramount has also pointed to regulatory approvals the deal has received elsewhere, including from the Trump administration last month. The temporary halt gives the states time to build their case, but whether the merger ultimately proceeds now rests on the outcome of the 3 August hearing and any subsequent ruling.