US Judge Suspends Paramount’s Acquisition of Warner Bros.

san francisco:A federal judge in California on Monday ordered Paramount Skydance and Warner Brothers Discovery to temporarily pause their merger while litigation continues in which multiple states challenge the deal.

The companies were barred from closing their $110 billion deal for 14 days, pending another hearing on Aug. 3 on an injunction that would prevent Paramount and Warner Brothers from closing the transaction before a final decision is reached.

In his decision, the judge said the states raised “serious questions” about the deal’s potential to be anti-competitive, adding that “the balance of equities and the public interest tipped sharply in favor of the Plaintiff States.”

Last week, 12 states, led by California, filed a lawsuit to block the deal, directly challenging the Trump administration’s Justice Department, which approved the merger last month.

In a statement Monday, California Attorney General Rob Bonta praised the temporary restraining order as “a critical first win in our case to ensure this mega-merger never sees the light of day.”

A Paramount spokesperson told Variety that the company was “grateful for the Court’s swift decision” and emphasized that it “maintained the status quo while the Court considered the antitrust issues presented.”

The merged company, which was formed after Netflix withdrew from the struggle to acquire Warner Brothers, acquired CNN, Warner Bros. It will control a broad list of assets, including Pictures and streaming service HBO Max.

The states allege in their complaint that the combined company would control about 27 percent of wide-release motion picture distribution and a similar percentage of basic cable channel licenses.

The saga has become politically charged, with President Donald Trump publicly saying he would weigh in on the deal while the fate of CNN, a frequent target of the president’s ire, remains uncertain.

California’s attorney general said last week that a merger of two of Hollywood’s five major film distributors would lead to “higher prices, lower quality and less content” for audiences.

“California and our sister states are fighting for free and fair markets, not fraudulent markets. America has no king in its government or our economy,” Bonta said.

The other 11 states joining the lawsuit, all led by Democrats, are Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington.

Paramount withdrew the suit’s allegations, framing the deal as a boon for competition in the media industry.

“This merger is legal, pro-competitive, and will benefit consumers, creators, workers, and the entertainment industry,” a Paramount spokesperson said. he said.

“We will continue to vigorously defend the action and look forward to hearings on the merits of the State AGs’ action.”

– Tinsletown feud –

The Trump administration approved the blockbuster deal on June 12 without requesting a single change, paving the way for one of the biggest media mergers in recent years.

This was a big win for media mogul David Ellison; his father, Oracle co-founder Larry Ellison, largely financed the takeover and is a Trump ally.

The fight against Warner Brothers began last year when media giants Netflix and Paramount went to war for the famous film studio and its valuable catalogue.

Cautious Tinseltown reluctantly lined up behind Netflix as the lesser of two evils, but watched as Paramount continued to increase its bid until the streamer pulled out in February.