The $111 billion acquisition of Warner Bros. Discovery by Paramount Skydance has been put on hold until at least 2027, after a federal judge in Oakland sided with a twelve-state coalition and the Writers Guild of America.
U.S. District Judge Araceli Martínez-Olguín granted a temporary restraining order on July 20 and extended it on July 24, pausing all merger activity while she weighs two preliminary injunction motions. Under an agreement approved the same day, Paramount cannot close the deal until five days after a merits ruling, or June 1, 2027, whichever comes first.
The lawsuit, led by California Attorney General Rob Bonta, alleges the combined company would control roughly 27 percent of the wide-release theatrical distribution market, extinguishing competition across wide-release film distribution, top-grossing film distribution, and basic cable channel licensing. The judge found the states presented compelling evidence of market dominance, specifically rejecting Paramount's argument that streaming competition softens the impact. New York AG Letitia James called halting the merger "a critical victory." A separate WGA challenge alleges the deal would depress writer pay and reduce opportunities.
A preliminary injunction hearing is set for August 3. Paramount, which has called the lawsuit "one of the weakest merger challenges in modern antitrust history," is seeking a mini-trial in August to defend a deal it describes as "lawful, pro-competitive and will benefit consumers, creators, workers and the entertainment industry." Bonta has signaled no openness to settlement: "We're not interested in behavioral remedies — empty promises, self-serving promises, promises that are unenforceable."
The European Commission has approved the deal with conditions. Starting October 1, Paramount owes WBD shareholders $650 million per quarter if nothing closes.