Paramount Skydance’s planned takeover of Warner Bros. Discovery just hit a major legal roadblock. U.S. District Judge Araceli Martínez-Olguín issued a temporary restraining order on Monday that prevents the companies from making progress to close the deal for 14 days. The ruling comes one week after a coalition of 12 states filed a lawsuit in federal court in California seeking to block the merger, arguing it would harm movie theaters, cable providers, and consumers. The lawsuit makes the case that the merged company would hold “enormous bargaining power” over movie theaters and cable companies while reducing competition. The states say that could result in higher prices for movie tickets and cable packages, as well as lower-quality services and fewer overall movies and television shows.
Although the Trump administration’s Justice Department cleared the merger last month, the states are now asking the court to prevent the companies from closing the deal until this lawsuit is settled. Paramount and Warner Bros. Discovery agreed to the roughly $110 billion takeover earlier this year after Paramount fought off a competing bid from Netflix. The deal follows Skydance’s takeover of Paramount last year.
