Judge issues temporary restraining order in Paramount - Warner Bros. merger

A federal judge on Monday issued a 14-day temporary restraining order pausing Paramount's proposed $81 billion takeover of Warner Bros. Discovery.   The order comes after 12 states filed a lawsuit last Monday seeking to block the deal, arguing the merger would eliminate competition in Hollywood and reduce choices for consumers nationwide.

The deal now gives the states more time to see their case through in court as the temporary restraining order halts the deal from progressing for at least 14 days, although the pause could be extended for up to 28 days. 

The court has set Aug. 3 as a date for a hearing on the states' preliminary injunction motion, although that schedule could also be pushed back.

The twelve states, California, states joining Monday's lawsuit include Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington, sued to block Paramount’s pending buyout of Warner, alleging that such a combination would "extinguish competition" in Hollywood and lead to fewer choices for consumers, particularly moviegoers and cable customers across the U.S.

The states’ top prosecutors called on Warner and Paramount to not close the transaction until after a court had time to "fully evaluate" their claims. And when the companies refused, they filed for a temporary restraining order — which is what District Judge Araceli Martínez-Olguín granted on Monday. That opens the door to a potential preliminary injunction that the states are also seeking to effectively block the deal.

Including debt, Paramount’s proposed purchase of Warner is valued at nearly $111 billion (or $31 per share) based on current outstanding shares.

Warner and Paramount argue that merging will be good for growth in the industry and give consumers access to more content, especially if HBO Max and Paramount+ libraries are combined. But critics have decried what further consolidation could mean in an industry already controlled by just a few major players.

Paramount did not immediately comment on Monday's order but has vowed to "vigorously defend" its Warner acquisition. Paramount previously called the states’ complaint "wrong on both the facts and the law," maintaining that a merger would instead strengthen competition against bigger entertainment rivals. And it touted regulatory green lights the deal has received elsewhere, including from the Trump administration.

The temporary restraining order granted Monday halts the deal from progressing for at least 14 days, although the pause could be extended for up to 28 days. The court has set Aug. 3 as a date for a hearing on the states' preliminary injunction motion, although that schedule could also be pushed back.

Consumer