Paramount Skydance Corp’s $110 billion takeover of Warner Bros. Discovery Inc. is temporarily halted by a federal judge.
On Monday, U.S. District Judge Araceli Martínez-Olguín paused the merger between the two media giants for 14 days after they hoped to seal the deal on July 22, according to Bloomberg Law. Fearing that the merger would harm cable and film competition, 12 states, including California, Arizona, Massachusetts, and Washington, sued Paramount and Warner Bros. on July 13, blocking the deal.
Though Warner Bros. has already agreed to sell to Paramount, the judge is preventing Paramount from finalizing the decision. A pre-existing merger-agreement provision mandates Paramount pay WBD shareholders if the deal isn’t closed by September 30.
The hearing is scheduled for Aug. 3, determining whether the deal will be blocked indefinitely.
The deal would allegedly result in 90% of the media market controlled by four companies: Walt Disney Co., Universal, Sony Pictures Entertainment, and the Paramount-Warner merger. The lawsuit also claims that the merged company would control 27% alone of the “market for films widely released to theaters” as well as 30% of anticipated blockbusters, according to Bloomberg Law.
New York Attorney General Letitia James, one of the 12 state attorneys general, celebrated the judge’s decision, saying the deal would harm industries, workers, artists, businesses, and consumers.
“Paramount’s unlawful merger with Warner Bros. would mean more expensive theater tickets, higher cable bills, fewer opportunities for workers, and fewer original stories shared with audiences across the country,” James said.
This merger would bring two streaming platforms, two movie studios, and two news organizations under David Ellison’s control, the chief executive officer of Skydance Media.
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