A judge partially granted the request from a dozen state attorneys general to temporarily place the $110 billion merger of Paramount and Warner Bros. Discovery on hold, as reported by Variety and Reuters. US District Judge Araceli Martínez-Olguín said that based on the new company’s market share, “the Court is persuaded that it can presume the proposed merger is likely to violate antitrust laws,” and that the states showed “irreparable harm” could occur without a temporary restraining order.
A week ago, California, Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington sued to block the deal for 28 days, saying the newly-created “media behemoth” would harm competition, and that if the deal is allowed to close, then the companies could start hard-to-undo actions like layoffs and information sharing.
The judge put in place a 14-day restraining order and set a hearing for the preliminary injunction on August 3rd. If the deal hasn’t closed by September 30th, Paramount will owe Warner Bros. investors millions of dollars based on how long it takes, as laid out in the agreement it used to beat Netflix’s $83 billion offer.
California AG Rob Bonta said over the weekend that the ticking fee starting in October “is a choice that Paramount made. They agreed to it as a party with Warner Bros. They might regret it, but they absolutely knew that this proposed merger was going to have to go through a regulatory process, and that that would take time,” while also dismissing threats about Paramount moving out of California, and saying that a CNN spin-off plan wouldn’t resolve the states’ lawsuit. After the judge’s decision was released on Monday, Bonta released a statement saying, “This is a critical first win in our case to ensure this megamerger never sees the light of day.”