US court freezes Warner Bros-Paramount deal

The ruling came in a lawsuit brought by a coalition of 12 state attorneys general, led by California prosecutor Rob Bonta. The plaintiffs claim that the deal violates antitrust laws.

The merger, worth about $111 billion, would bring together, under the control of David Ellison (son of Oracle founder Larry Ellison), the film studios Paramount and Warner Bros., streaming services Paramount+ and HBO Max, the CBS television network, dozens of cable channels, as well as the news divisions of CNN and CBS News. The plaintiffs argue that consolidation will lead to higher prices and less content for viewers.

The judge scheduled a hearing on the issue of a preliminary injunction for August 3, which will determine whether the deal will be frozen for a longer period until the merits of the case are considered (the trial on the lawsuit is scheduled for mid-2027).

Previously, the US Department of Justice completed its own antitrust review of the deal, finding no threat to competition in it, but this did not stop the states from filing a separate lawsuit.

For Paramount, the delay is fraught with financial costs: under the terms of the agreement, if the deal is not closed by September 30, the company is obliged to pay Warner Bros. shareholders. Discovery at 25 cents per share quarterly – that’s more than $600 million per quarter.