TRENTON — A federal judge has temporarily stopped the proposed $110 billion merger of Warner Bros. Discovery and Paramount Skydance while a multistate antitrust challenge moves forward.
U.S. District Judge Araceli Martínez-Olguín issued a temporary restraining order Monday preventing the companies from completing the deal or taking steps to combine their operations. The order will remain in place for 14 days unless it is extended. A hearing on a longer-lasting preliminary injunction is scheduled for Aug. 3 in Oakland, California.
New Jersey Attorney General Jennifer Davenport joined attorneys general from 11 other states in filing the lawsuit July 13 in the U.S. District Court for the Northern District of California.
The states contend the merger would violate federal antitrust law by reducing competition in film distribution, blockbuster movie releases and the licensing of basic cable channels. They argue the transaction could lead to increased consumer prices, fewer programming choices and lower-quality entertainment.
“Today’s order, which temporarily blocks this unlawful merger while our case continues, is a major win for consumers,” Davenport said. “It is the first step in what I hope will be a total victory for New Jerseyans, who can ill-afford another price hike caused by opportunistic billionaires.”
The proposed transaction calls for Paramount to acquire Warner Bros. Discovery for approximately $110 billion. The combined company would control two of Hollywood’s five major studios, more than 50 basic cable channels, CBS, HBO, Showtime and the Paramount+, HBO Max and Discovery+ streaming services.
The court said the states presented substantial evidence that the combined company could control about 27% of the market for widely released theatrical films. The judge also found the transaction could cause irreparable harm because it might be difficult or impossible to separate the businesses after their operations and employees were combined.
Paramount and Warner Bros. argued that the states relied on flawed assumptions about the entertainment industry and underestimated competition within the market. The judge found those arguments raised factual disputes but did not outweigh the states’ concerns at this stage of the case.
The restraining order requires both companies to continue operating independently while the court considers whether to block the merger throughout the litigation.
California is leading the lawsuit. The coalition also includes Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington.
