A federal judge in California on Monday temporarily blocked Paramount Skydance and Warner Bros. Discovery from completing their proposed $110 billion merger, granting a 14-day restraining order as a multistate antitrust lawsuit challenging the deal moves forward.The order prevents the companies from closing the transaction until at least August 3, when the court will hear arguments on a preliminary injunction that could bar the merger from being completed until a final ruling is issued.In her ruling, the judge said the states had raised “serious questions” about whether the merger could reduce competition, adding that “the balance of equities and public interest tip sharply in favor of the Plaintiff States.”The legal challenge was filed last week by 12 Democratic-led states, headed by California, in a direct challenge to the Trump administration’s Justice Department, which approved the merger in June.California Attorney General Rob Bonta welcomed the court’s decision, calling the temporary restraining order “a critical first win in our case to ensure this megamerger never sees the light of day.”According to the lawsuit, the combined company would control about 27% of wide-release theatrical film distribution in the United States and a similar share of the basic cable channel licensing market. The states argue that combining two of Hollywood’s five major film distributors would reduce competition, resulting in higher prices, lower quality, and less content for consumers.“California and our sister states are fighting for free and fair markets, not rigged markets. America has no kings in government or our economy,” Bonta said.Paramount rejected the allegations, maintaining that the transaction would strengthen competition in the media industry.A Paramount spokesperson told Variety that the company is “grateful for the Court’s swift order” and said it “preserves the status quo while the Court considers the antitrust issues presented.”The spokesperson added: “This merger is lawful, pro-competitive, and will benefit consumers, creators, workers, and the entertainment industry.”“We will continue to vigorously defend the transaction and will look forward to the hearings on the substance of the State AGs’ action.”The proposed merger, approved by the Trump administration on June 12 without requiring any changes, would create one of the world’s largest entertainment companies. The combined group would include assets such as CNN, Warner Bros. Pictures, and the HBO Max streaming service.The deal also carries political implications, with President Donald Trump saying he would weigh in on the merger as the future of CNN, a frequent target of his criticism, remains uncertain.The acquisition represents a major victory for media executive David Ellison, whose takeover bid was largely financed by his father, Oracle co-founder Larry Ellison, a Trump ally.The bidding war for Warner Bros. began last year when Netflix and Paramount competed to acquire the studio. Netflix eventually withdrew its offer in February after Paramount continued to raise its bid, paving the way for the proposed merger.
