A federal judge has temporarily halted the proposed $81 billion merger between Paramount and Warner Bros. Discovery, granting a two-week reprieve to states challenging the deal in court.
The ruling follows a lawsuit filed last week by twelve states, led by California.
They contend that the combination would "extinguish competition" within Hollywood, ultimately limiting choices for consumers, particularly moviegoers and cable subscribers across the United States.
Prosecutors from the challenging states had initially urged Warner and Paramount to delay closing the transaction until a court could "fully evaluate" their claims.
Following the companies' refusal, the states sought a temporary restraining order, which District Judge Araceli Martínez-Olguín approved on Monday.
This judicial intervention now paves the way for a potential preliminary injunction, a further measure the states are pursuing to effectively block the merger.
California’s attorney general filed the multi-state lawsuit with the attorneys general in Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington.
The lawsuit alleges that combining the two companies — two of the largest media and entertainment giants in the U.S. — violates antitrust laws.
The states also say that it will stifle competition, cut jobs in film and television, raise prices for consumers and reduce variety and quality of content.
The states allege a violation of the Clayton Act, which is an antitrust law that prevents mergers or monopolies that would reduce competition.
The states have asked Paramount not to close the deal until the case is decided — and say they will file a temporary restraining order if they do.
“The unlawful merger of these two entertainment behemoths would lead to higher prices, lower quality and less content for film and television, harming movie theaters, basical cable distributors, and ultimately, audiences of every sofa and movie theater seat in the U.S.,” Attorney General Rob Bonta said in a statement announcing the lawsuit.
