Paramount and Warner Bros Discovery have agreed to delay closing their $81-billion merger well into next year, a stunning move that arrives as a judge continues to consider a challenge from 12 states seeking to block the deal altogether.
Paramount said in a filing Friday that it won’t close its Warner buyout until either a court ruling is made on the states’ claims.
The agreement comes just days after US District Judge Araceli Martínez-Olguín granted a temporary restraining order to freeze the transaction for weeks, noting that the states had raised some “serious questions” and made a strong case about the merger’s potential to “substantially lessen competition.”
Paramount and the states have also agreed to defer an preliminary injunction hearing that was set for August 3. The states’ case in now headed down the path toward a larger antitrust trial.
Both sides touted the delay as a victory.
The result was “exactly what we have sought from the outset: a direct path to a trial based on the evidence,” Paramount said in a statement. The company, which was bought by Skydance last year, added that it looked forward to proving its transaction is “good for competition, good for consumers, and good for creators.”
Meanwhile, California Attorney General Rob Bonta who is leading the states’ case called the delay great news for audiences and media workers nationwide.
“Our argument against this illegal merger is straightforward: When too few corporations have too much power in markets central to American life, it makes things more expensive, and it makes things worse,” Bonta said in a statement. He added that the states were eager to see their challenge through court and ensure the Paramount-Warner combo “never sees the light of day.”
The Writers Guild of America has also filed a lawsuit seeking to block the merger, arguing that the deal would cause specific harm to movie and TV writers. The delay will give more time for that case to make its way through court, too.
States argue merger would harm Hollywood competition
A Warner-Paramount tie-up would bring together two of the last five legacy studios in Hollywood and a host of TV networks that include CNN. Warner’s HBO Max streaming service and fan favourite titles like ‘Harry Potter’ would come under the same roof as Paramount-owned CBS and the Paramount+ streaming service, which includes titles like ‘Top Gun.’
Last week, the 12 states which, beyond California, also include entertainment heavyweights like New York sued to block the buyout, alleging that such a combination would “extinguish competition” in Hollywood and lead to fewer choices for consumers, particularly movie-goers and cable customers.
Paramount has repeatedly called the states’ claims meritless and not reflective of the current industry.
The company points to tech and streaming giants’ growing reach across the entertainment industry and argues the merger would help it compete with bigger rivals like Netflix (which once wanted to buy much of Warner’s business itself) and others “who have harmed the market for theatrical exhibition.”
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