Hollywood\u2019s biggest deal in decades is on hold.<\/p>\n
On Monday, a federal judge temporarily blocked Paramount Skydance\u2019s efforts to complete its purchase of Warner Bros. Discovery, ruling that the proposed $111-billion merger \u201craises serious questions\u201d about whether the combination violates U.S. antitrust law.<\/p>\n
District Judge Araceli Mart\u00ednez-Olgu\u00edn, based in Oakland, granted a request for a temporary restraining order from a coalition of 12 state attorneys general, led by California Atty. Gen. Rob Bonta, to freeze the deal while the court delves more closely into its impact on markets.<\/p>\n
The order pauses the deal for 14 days. Mart\u00ednez-Olgu\u00edn\u2019s ruling sets up a showdown for Aug. 3, when she considers a motion for a preliminary injunction \u2014 which, if granted, could tie up the deal for months in advance of a trial.<\/p>\n
\u201cThis is a critical first win in our case to ensure this megamerger never sees the light of day,\u201d Bonta said in a statement. \u201cHistory tells the tale of what happens when a few people have great power over markets that are central to Americans\u2019 lives: fewer opportunities for more people, worse products and services for all people.\u201d <\/p>\n
Two century-old film studios \u2014 with rights to Harry Potter, Batman, Scooby-Doo, \u201cTop Gun,\u201d \u201cTed Lasso\u201d and \u201cGame of Thrones\u201d \u2014 would be combined, and HBO, CNN and HGTV would come under new ownership.<\/p>\n
\u201cThe judge basically said, \u2018Look, let\u2019s not race to the finish line here,\u2019\u201d Eric Talley, a Columbia Law School professor, said in an interview. \u201cAt the end of the day, maybe this thing gets signed off on, but I think the AGs are going to be given a fair chance to bring their claims forward.\u201d<\/p>\n
The ruling dealt a blow to tech scion David Ellison\u2019s efforts to quickly finalize his massive merger, which has the support of President Trump. Ellison wants to complete the deal by September to avoid a higher payout to Warner Bros. Discovery shareholders.<\/p>\n
Paramount, in a statement, said the restraining order simply preserves the status quo, which Paramount had already pledged to do in court papers last week that offered to hold off on finalizing the transaction. <\/p>\n
\u201cWe are confident the evidence will demonstrate that the State AGs\u2019 antitrust arguments are without merit as their alleged markets and claims of anticompetitive effects are without any basis in modern market realities,\u201d Paramount said in the statement.<\/p>\n
Larry Ellison, co-founder of software giant Oracle, is bankrolling his son\u2019s ambitions to acquire a second major entertainment company<\/a> in less than a year. The Ellison family acquired the smaller Paramount in August. <\/p>\n The Democratic state attorneys general, including from New York, New Mexico, Nevada, Oregon and Washington, filed their lawsuit<\/a> a week ago. <\/p>\n The 37-page lawsuit alleges that Paramount\u2019s proposed takeover \u2014 the largest Hollywood deal in decades \u2014 would violate the U.S. Clayton Antitrust Act, a century-old law to prevent mergers that weaken competition and raise costs for consumers.<\/p>\n The lawsuit represents the stiffest challenge to a deal that had been swiftly clearing its various regulatory hurdles. Nearly two dozen regulators from around the globe, including Australia, Austria and Saudi Arabia, have already signed off. <\/p>\n