Judge extends Paramount-Warner Bros. deal freeze to mid-August as antitrust lawsuits mount

The ruling

U.S. District Judge Araceli Martínez-Olguín on Thursday extended the temporary restraining order (TRO) that pauses Paramount Skydance's takeover of Warner Bros. Discovery. The order, first issued on Monday, now runs through at least August 17, meaning the companies cannot close the deal before that date. The judge acted after Paramount requested more time to prepare its case against a preliminary injunction that would block the merger for the duration of the lawsuits. The court also urged the parties to confer on a schedule and file a joint report by July 24.

At best, Defendants' proof regarding these robust, dynamic markets creates disputes regarding the facts and legality of the Transaction's market effects. Plaintiff States' showing at least demonstrates that serious questions going to the merits remain.

The lawsuits

A coalition of 12 state attorneys general, led by California's Rob Bonta, filed suit on July 13 alleging the merger violates the Clayton Act by reducing competition in basic cable and theatrical distribution. The states argue that combining two of the top three cable programmers and two of the top five film distributors would harm theaters and cable companies. Separately, the Writers Guild of America sued this month, claiming the deal would suppress screenwriters' pay and lead to homogenized content. The WGA's motion for an injunction will be heard on the same schedule as the states' request.

We look forward to blocking Paramount's illegal acquisition of Warner Bros.

Paramount's pushback

Paramount has asked the court to hold a three-day evidentiary hearing in late August, arguing it needs to cross-examine the states' expert witnesses on market definition and competitive dynamics. The company contends the states' market calculations are faulty. The states oppose a multi-day hearing, saying it would effectively be a trial without adequate preparation time. The judge indicated she is open to delaying the August 3 hearing if all sides agree and Paramount pledges not to close the deal in the interim.

We need to address critical factual issues involving market definition, real-world competitive dynamics, barriers to expansion, and incentives.

Financial stakes

The deal, valued at $110 billion to $111 billion, was announced in February after Netflix pulled out of the bidding. Paramount Skydance CEO David Ellison had been confident of swift regulatory approval, and the company sweetened its offer with a ticking fee provision. If the merger is not completed by September 30, Paramount must pay Warner Bros. Discovery shareholders $650 million per quarter, equivalent to about $6.9 million to $7 million per day. The U.S. Justice Department cleared the deal in June, reportedly over staff objections, and the European Commission approved it with the condition that Paramount end its European film distribution partnership with Universal.

What's next

The August 3 hearing on the preliminary injunction remains on the calendar for now, but the judge has signaled flexibility if the parties reach a consensus. If the injunction is denied, Paramount has indicated it will close the deal, leaving the states to try to unwind the merger afterward. If granted, the deal would be frozen until a full trial on the merits. The outcome will shape the future of two of Hollywood's largest studios, their streaming services HBO Max and Paramount+, and the broader media landscape.