Hollywood deal: US judge puts Warner takeover on hold until mid-August

The trigger for the timeout was the lawsuit filed by twelve US states that want to overturn the deal worth more than $100 billion. They first demand a long-term interim injunction against the completion of the takeover. The judge explained that the extended break until August 17th was necessary in order to decide on the parties’ applications regarding the interim injunction.

States see competition problem

The states argue, among other things, that the merger will distort competition for popular films and thereby put cinemas under pressure. From the judge’s point of view, they were at least able to demonstrate that Paramount and Warner together had a significant market share in the business – which initially justified a suspension of the merger for several weeks.

The US government had previously approved the billion-dollar deal without any conditions. The Justice Department concluded that the merger would not harm competition or US consumers – both in the TV or streaming business and in film production. According to the Wall Street Journal, the takeover was waved through by the ministry’s leadership before the agency’s responsible lawyers could make a recommendation.

Trump supporters beat out Netflix

Paramount is backed by the family of software billionaire Larry Ellison, who is known as a supporter of President Donald Trump. Netflix originally agreed with Warner last year to purchase the industry giant’s streaming and studio business. But Paramount didn’t give up and made a higher bid for the entire Warner Bros. Discovery company, including television networks such as CNN. The deal is now worth around $111 billion.

Trump critics in the US fear that CNN could lose editorial independence under the Paramount umbrella – as has happened in other cases where media companies were taken over by billionaires loyal to the president. Trump has said several times that it is particularly important to him that the news channel, which often reports critically about him, also changes ownership in a Warner deal.