US Judge Temporarily Halts Paramount’s Acquisition of Warner Bros. Discovery

A U.S. federal judge has temporarily blocked Paramount Skydance’s proposed $110 billion acquisition of Warner Bros. Discovery, granting a request by a coalition of 12 U.S. states that argue the deal could significantly reduce competition in the entertainment industry.

According to court documents, U.S. District Judge Araceli Martínez Olguín on July 20 issued a 14 day temporary restraining order, preventing Paramount from completing the transaction while the court considers whether a longer injunction should be imposed. A hearing on the states’ request for a preliminary injunction has been scheduled for August 3.

The antitrust lawsuit, led by California Attorney General Rob Bonta and joined by 11 other states, alleges that the merger would create one of the world’s largest media companies, giving it excessive control over film production, television networks and streaming services. The states argue that the transaction could reduce competition, increase prices for consumers and advertisers, and lead to job losses across the entertainment sector.

Paramount has rejected the allegations, arguing that the lawsuit misinterprets U.S. antitrust law and that the merger is necessary to strengthen its ability to compete with global streaming giants such as Netflix and The Walt Disney Company. The company also warned that delaying the transaction could further weaken its financial position and create uncertainty for employees and investors.

The proposed acquisition is one of the largest media deals in recent years and forms part of Paramount Chief Executive David Ellison’s strategy to expand the company’s film, television and streaming businesses. However, under the merger agreement, Paramount could face financial penalties if the transaction is not completed by September 30, including payments estimated at around $7 million per day to Warner Bros. Discovery shareholders.

The ruling marks a significant legal setback for the transaction, although it does not determine the outcome of the broader antitrust case. If the court later grants a preliminary injunction, the merger could remain on hold until the lawsuit is fully resolved, a process that may take several months.