Court pauses Paramount-Warner Bros. merger

What happened

A federal judge in California on Monday paused Paramount’s $111 billion acquisition of Warner Bros. Discovery, agreeing with 12 states that the merger of two of Hollywood’s remaining five major movie studios could run afoul of antitrust laws. The combined company would also amalgamate CBS, CNN, HBO Max, Paramount+ and dozens of cable channels. The “pause will last only 14 days,” said The New York Times. But in her ruling, U.S. District Judge Araceli Martínez-Olguín “raised the prospect of a much longer delay.”

Who said what

California Attorney General Rob Bonta, the lead plaintiff in the lawsuit, hailed the ruling as a “critical first win in our case to ensure this megamerger never sees the light of day,” he said in a statement. Paramount said the lawsuit’s “antitrust arguments are without merit” and it would “vigorously defend” its “lawful, pro-competitive” merger. Along with the dozen states, the merger is being challenged in court by a group of consumers, the Writers Guild of America and Paramount shareholders.

What next?

Martínez-Olguín said in her order she would consider issuing a longer injunction at an Aug. 3 hearing. Any lengthy delay in the merger, which had been set to be completed as soon as Tuesday, would “have huge financial costs for Paramount,” NPR said. Starting Oct. 1, it has to pay Warner shareholders “roughly $650 million for every 90 days the deal is set back.”

The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

Latest Videos From

Watch full video here: