A federal judge has paused the $110 billion Paramount Skydance acquisition of Warner Bros. Discovery until August 3, giving 12 states more time to argue that the deal would reduce competition.
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The states say the merger would weaken competition in wide-release films, top-grossing theatrical distribution and basic cable licensing. Movie theaters, television distributors and viewers could face higher costs and fewer choices, according to the lawsuit.
The court found that the states made a strong initial case that the transaction may violate antitrust law. Closing before a full hearing could also trigger job cuts, company integration and data sharing that would be difficult to reverse.
A completed deal would place Paramount Pictures and Warner Bros. under one company while combining Paramount+, HBO Max, CBS, MTV, CNN and HBO.
Bonta called the pause “a critical first win in our case to ensure this megamerger never sees the light of day.”
Paramount rejected the state claims and said modern competition includes streaming and technology groups such as Netflix, Amazon and Apple.
“We are confident the evidence will demonstrate that the State AGs’ antitrust arguments are without merit as their alleged markets and claims of anticompetitive effects are without any basis in modern market realities,” a Paramount spokesperson said.
Paramount CEO David Ellison previously targeted a September closing. A longer court block could disrupt that schedule and delay plans to build a larger rival to Netflix. Paramount may also face a fee of about $7 million per day if completion slips beyond September 30.