California judge pauses Paramount-Warner Brothers merger for 14 days

A federal judge in California has ordered Paramount Skydance and Warner Brothers Discovery to temporarily pause their planned merger while a lawsuit brought by multiple states moves forward.

The companies are barred from closing the $110 billion deal for 14 days. A further hearing is scheduled for August 3 on whether to issue a preliminary injunction, which would stop the companies from completing the transaction before a final decision in the case.

The judge said the states had raised serious questions about whether the deal could harm competition. The ruling also said the balance of equities and the public interest strongly favored the plaintiff states.

Last week, 12 Democratic-led states, led by California, sued to block the merger. The lawsuit directly challenges the Trump administration's Justice Department, which approved the deal last month.

California Attorney General Rob Bonta called the temporary order a critical first win in the effort to stop the merger. He said last week that combining two of Hollywood's five major film distributors would mean higher prices, lower quality and less content for audiences.

A Paramount spokesperson told Variety that the company was grateful for the court's swift order and said it preserved the status quo while the court considered the antitrust issues. The company rejected the states' allegations, saying the merger is lawful, pro-competitive and would benefit consumers, creators, workers and the entertainment industry.

The combined company would control assets including CNN, Warner Bros. Pictures and the HBO Max streaming service. The states say in their complaint that it would control about 27 percent of wide-release theatrical film distribution and a similar share of basic cable channel licensing.

The dispute has also become politically charged. President Donald Trump has said publicly that he would weigh in on the deal, as CNN, a frequent target of his criticism, is among the assets affected.

The Trump administration approved the deal on June 12 without requiring changes. The approval was a win for media executive David Ellison, whose father, Oracle co-founder Larry Ellison, helped finance the takeover and is a Trump ally.

The fight for Warner Brothers began last year, when Netflix and Paramount competed to buy the studio and its back catalog. Netflix later withdrew from the bidding in February after Paramount continued raising its offer.