Judge says Paramount and Warner must halt merger for at least two weeks, granting states’ request

NEW YORK (AP) — A federal judge ruled Monday that Paramount and Warner Bros. Ordered Discovery to be stopped $81 billion merger allowing at least two weeks States challenging the agreement They have more time to try their cases in court.

Twelve states, led by California, filed a lawsuit last week to block Paramount from acquiring Warner; He claimed that such a combination would “eliminate competition” in Hollywood and lead to fewer choices for consumers, particularly moviegoers and cable customers across the United States.

The states’ top prosecutors urged Warner and Paramount not to close the transaction until it was time for the court to “fully consider” their claims. When the companies refused, they filed for a temporary restraining order; District Judge Araceli Martínez-Olguín made the decision on Monday. This opens the door to a potential injunction in which states also seek to effectively block the deal.

“This is a critical first win to ensure that this mega-merger in our case never sees the light of day,” California Attorney General Rob Bonta said in a statement following Monday’s order. he said. “History tells the story of what happens when a few people have great power over the markets at the center of Americans’ lives: fewer opportunities for more people, worse products and services for all people.”

Warner-Paramount will bring partnership together two of the last five legacy studios In Hollywood — as well as many TV networks, titles fill their broadcast libraries and news operations. HE includes Warner’s HBO Max launches fan favorites like “Harry Potter” and even CNN Movies like “Top Gun” and the Paramount+ streaming service come together under the same umbrella as CBS, which is owned by Paramount.

Paramount did not immediately comment on Monday’s order. However, the acquired company by Skydance just last year he vowed to “vigorously defend” its acquisition of Warner. Paramount had previously called the states’ complaint “incorrect on both facts and law” and argued that the merger would instead strengthen competition against larger entertainment rivals. And it announced that the deal had received regulatory green lights elsewhere as well. President Donald Trump’s administration last month.

The temporary restraining order issued Monday halts progress on the deal for at least 14 days, but the pause could be extended for up to 28 days. The court set August 3 as the hearing date on the states’ request for preliminary injunction, but that date may also be postponed.

The clock is ticking. Many had previously been preparing for Paramount and Warner to try to finalize their deal later this week. Before Monday’s ruling, the companies had proposed wrapping up the injunction hearing by the end of August and leaving time for a possible appeal by Sept. 30; This date was on Paramount’s mind because it had been promised to pay shareholders additional “toll” compensation of approximately $7 million per day if the deal was not closed by then.

But states called such a timeline unprecedented and unfair. They argued that the money Paramount might have to pay after Sept. 30 is a risk of a decision the company makes on its own, and they argued at a hearing Friday that starting the trial in April 2027 would provide enough time for discovery and the presentation of appropriate evidence.

Including billions of dollars in debt, Paramount’s offer to acquire Warner is currently worth about $111 billion based on outstanding shares.

Beyond California, states joining Monday’s lawsuit include Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington. And others – incl. Writers Guild of America – are also suing to block the merger.