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NEW YORK -- A federal judge on Monday ordered Paramount and Warner Bros. Discovery to halt their $81 billion merger for at least two weeks, allowing states that are challenging the deal more time to see their case through in court.
Twelve states, led by California, sued to block Paramount's pending buyout of Warner last week -- alleging that such a combination would "extinguish competition" in Hollywood and lead to fewer choices for consumers, particularly moviegoers and cable customers across the U.S.
The states' top prosecutors called on Warner and Paramount to not close the transaction until after a court had time to "fully evaluate" their claims. And when the companies refused, they filed for a temporary restraining order -- which is what District Judge Araceli Martinez-Olguin granted on Monday. That opens the door to a potential preliminary injunction that the states are also seeking to effectively block the deal.
"This is a critical first win in our case to ensure this megamerger never sees the light of day," California Attorney General Rob Bonta said in a statement following Monday's order. "History tells the tale of what happens when a few people have great power over markets that are central to Americans' lives: fewer opportunities for more people, worse products and services for all people."
A Warner-Paramount tie-up would bring together two of the five last legacy studios in Hollywood -- as well as host of TV networks, titles filling streaming libraries and news operations. Warner's HBO Max, fan favorites like "Harry Potter" and even CNN would come under the same roof of Paramount-owned CBS, movies like "Top Gun" and the Paramount+ streaming service.