Despite the deal to buy Warner Bros. Discovery for roughly $111 billion having seemingly been struck, the David Ellison-run Paramount Skydance purchase is by no means done. In the past two weeks, a coalition of several states have sued to put a stop to the Hollywood-shattering merger. The suit alleges (we think pretty reasonably) that such a purchase would violate federal antitrust laws. The President is buddies with the Ellisons so he’s going to push it through, but luckily, at least for now, the legal system is a stopgap.
As Variety reports, Judge Araceli Martinez-Olguin placed a 14-day restraining order on the deal to properly evaluate the lawsuit. Paramount had previously said it wouldn’t try to finalize the deal before July 22.
“Plaintiff States’ showing at least demonstrates that serious questions going to the merits remain, weighing in favor of preliminary injunctive relief,” the judge wrote. Paramount has acknowledged it will not be harmed by the delay until the end of September, she added. “Paramount and Warner Bros. will continue to operate as separate, viable companies competing in the marketplace while they wait for the Court to adjudicate this case. The balance of equities, combined with the public’s vital interest in antitrust enforcement, therefore tips sharply in favor of the requested injunctive relief.”
The 12-state coalition, which California spearheaded, also seeks a “preliminary injunction, which would block the merger until the judge rules on the merits of the states’ lawsuit.” The temporary restraining order could go from 14 days to 28 days if the judge so desires. She set an initial hearing on the injunction for Aug 3.
California Attorney General Rob Bonta called the judge’s ruling a ““critical first win in our case to ensure this megamerger never sees the light of day.”
“History tells the tale of what happens when a few people have great power over markets that are central to Americans’ lives: fewer opportunities for more people, worse products and services for all people,” Bonta added. “With our lawsuit, we’re fighting for a free and fair market and a thriving film and television industry that serves creatives and audiences alike. We have a full tank of gas, the law on our side, and look forward to continuing to make our case.”
Paramount is pushing for a hearing with live witnesses, but it needs it quickly. If the deal isn’t done and dusted prior to September 30, 2026, they’ll start to owe WBD millions of dollars per day. The judge also cited that the defendant’s initial assertion that the merger would make for efficiencies in the streaming market cannot enter into the argument.
““Courts have expressly and repeatedly rejected the defense that a challenged merger will result in economic efficiencies ancillary to competition in the relevant market.”
We shall see what happens, but the injunction itself is often the “whole ballgame” as Variety puts it.
Kyle Anderson is the Senior Editor for Nerdist. He hosts the weekly pop culture deep-dive podcast Laser Focus. You can find his film and TV reviews here. Follow him on Letterboxd.