Key facts
- A federal judge has temporarily halted the $111 billion merger of Paramount Skydance and Warner Bros. Discovery for 14 days.
- The pause was issued in response to a lawsuit filed by 12 state attorneys general.
- The states argue the merger will substantially lessen competition in the theatrical-film market.
- The European Commission had previously granted conditional approval for the deal.
- A hearing to determine if a preliminary injunction will be issued is scheduled for August 3.
A federal judge has temporarily halted the $111 billion merger between Paramount Skydance and Warner Bros. Discovery, granting an early victory to 12 state attorneys general who sued to block the deal. U.S. District Judge Araceli Martínez-Olguín issued a 14-day temporary restraining order, prohibiting the companies from completing the merger or consolidating operations.
The states, led by California Attorney General Rob Bonta, argue that the combination of two major Hollywood studios and owners of basic cable channels will substantially lessen competition. Judge Martínez-Olguín stated that the states made a strong showing that the transaction is likely to violate antitrust laws, citing the projected 27 percent share of the wide-release theatrical distribution market for the merged entity.
While the U.S. deal faces this judicial pause, the European Commission had previously granted conditional approval, requiring Paramount to end its film distribution joint venture with Universal Pictures and refrain from co-distributing films with Universal or Disney in the European Economic Area for 10 years. Critics of the merger warn it could lead to job cuts, reduced film production, and diminished competition in the industry.