SAN FRANCISCO — A federal judge on Monday temporarily halted Paramount Skydance’s planned acquisition of Warner Bros. Discovery, blocking the companies from completing the $110 billion-plus merger while a court reviews an antitrust challenge brought by a coalition of U.S. states.
U.S. District Judge Araceli Martínez-Olguín granted a temporary restraining order requested by 12 state attorneys general, led by California, after finding that the states had raised significant concerns about whether the transaction could violate antitrust laws. The order prevents the companies from closing the deal for 14 days, with a hearing on a broader preliminary injunction scheduled for Aug. 3.
The states argued that combining Paramount’s media assets with Warner Bros. Discovery would reduce competition in entertainment markets, including theatrical film distribution and television. In court filings, they said the merged company could gain substantial market power and potentially affect consumers, competitors and industry workers.
Judge Martínez-Olguín wrote that the states had presented evidence showing the combined company would hold a substantial share of the wide-release theatrical distribution market, according to court reporting on the ruling.
Paramount Skydance has defended the merger, arguing that the combined company would be better positioned to compete with major technology and streaming companies. The company has disputed claims that the transaction would harm competition and said the deal would strengthen its ability to compete in a changing media landscape.
The U.S. Department of Justice’s Antitrust Division previously closed its investigation into the proposed merger, saying it determined the transaction was not likely to harm competition in areas including streaming, traditional television and theatrical film production and distribution.
The legal challenge by the states represents a separate review of the transaction. The dispute comes as media companies face pressure from declining traditional television audiences, rising streaming competition and increased consolidation across the entertainment sector.
The merger agreement includes financial consequences if the transaction is delayed beyond certain deadlines. Paramount faces potential additional costs if the deal cannot be completed by the agreed timeline, according to reports on the merger terms.
Paramount Skydance and Warner Bros. Discovery remain separate companies while the court considers the states’ request for a preliminary injunction. The next scheduled legal step is the Aug. 3 hearing, where the judge will consider whether to extend the block during the broader antitrust case.
