A federal judge has ordered Paramount Skydance and Warner Bros. Discovery to halt their proposed $111 billion merger. The temporary restraining order, effective for 14 days, prohibits the companies from completing the deal or consolidating operations.
The ruling is an early victory for a coalition of 12 states, led by California, that sued to block the merger. The states argue the deal would eliminate competition by combining two of the five major Hollywood studios and two of the five major owners of basic cable TV channels.
California Attorney General Rob Bonta called the order a 'critical first win' in the lawsuit. 'My office and attorneys general nationwide have secured an emergency order blocking the unlawful merger,' Bonta stated.
The case is being heard in the U.S. District Court for the Northern District of California. Judge Araceli Martínez-Olguín found the states made a 'strong showing' that the transaction would substantially lessen competition in the theatrical film market. The judge noted the merged entity would control 27 percent of the wide-release theatrical distribution market, a level courts have presumed could violate antitrust law if it reached 30 percent or more.