Paramount Skydance’s proposed $110 billion acquisition of Warner Bros. Discovery has encountered its first formal legal obstacle after a federal judge issued a temporary restraining order pausing the transaction for 14 days. The order follows an antitrust lawsuit filed by California and ten other states seeking to block the merger.
U.S. District Judge Araceli Martínez-Olguín approved the pause after hearing arguments in Oakland. She said the states had presented compelling evidence that the combined company could hold substantial market share in wide-release theatrical film distribution. The states contend the transaction would violate the Clayton Antitrust Act by reducing industry competition.
The proposed combination would place Paramount and Warner Bros. film studios, CBS, CNN, TNT, MTV, BET, Paramount+ and HBO Max within one company. State officials argue the merged business would control nearly one-third of films and basic cable programming, potentially increasing prices and limiting quality and consumer choice for audiences.
Paramount rejects those claims, describing the merger as lawful and pro-competitive. The company says it would support content production, employment, theatrical releases and investment while helping stabilize cable television amid cord cutting. Warner Bros. Discovery declined to comment on the temporary order or the states’ broader legal challenge this week.
Paramount had indicated it might close the transaction as early as July 22, once regulatory approvals were secured, but later offered to wait until mid-August. The court’s order preserves the current situation while antitrust questions are considered. The states may seek another restraining order or a preliminary injunction afterward, however.
The Justice Department approved the deal in June, and reviews remain underway in Europe and Britain. Paramount expects to close by September’s end. A delay beyond September 30 could trigger quarterly payments worth about $650 million to shareholders. Paramount faces a $7 billion breakup fee if regulatory barriers prevent completion.