OAKLAND, Calif. — A U.S. federal judge has temporarily halted Paramount Skydance Corp.'s proposed acquisition of Warner Bros. Discovery, siding with a coalition of 12 states that argued the roughly $110 billion deal could violate antitrust law and reduce competition in the entertainment industry.
U.S. District Judge Araceli Martínez-Olguín issued a temporary restraining order on July 20 that prevents the companies from completing the transaction while the court considers the states' broader challenge. The order is set to remain in effect for 14 days, with a hearing on a preliminary injunction scheduled for Aug. 3.
The states, led by California, argued that the merger would give the combined company substantial control over the market for wide-release theatrical film distribution. In her ruling, Martínez-Olguín said the states had presented evidence that the combined company would hold a substantial market share and that, based on that share alone, the court could presume the proposed transaction was likely to violate antitrust laws.
The ruling represents a setback for Paramount Skydance, which has been seeking regulatory approvals for the deal and had been moving toward closing. The U.S. Justice Department said in June that it had completed an eight-month antitrust investigation and concluded that the transaction was not likely to harm competition or American consumers in streaming, linear television or theatrical film development, production and distribution.
The Justice Department's decision does not prevent state attorneys general from pursuing their own antitrust case. The states' lawsuit seeks to block the merger on competition grounds, while Paramount has disputed the concerns raised about the transaction.
The proposed acquisition would combine Paramount's film and television assets with Warner Bros. Discovery's Warner Bros. studio, HBO Max streaming service and other media operations. The companies have argued that the combination would strengthen their ability to compete in an entertainment market increasingly dominated by large technology and streaming companies.
The deal has also faced regulatory scrutiny outside the United States. The European Commission approved the acquisition on July 22 subject to conditions addressing competition in European film distribution, while Britain's Competition and Markets Authority continues to examine the transaction.
Paramount said it has received antitrust clearances in several jurisdictions, including the United States, but the U.S. states' lawsuit remains a significant obstacle to closing the deal. The temporary restraining order will remain in place pending further proceedings, with the next scheduled court hearing set for Aug. 3.
