Only a few days ago, the states’ antitrust challenge to the Paramount-Warner Bros. merger still looked like a speed bump.
Now, it looks more like siege warfare — as Paramount has agreed to put the $111 million deal on hold for at least several months. In doing so, Paramount’s lawyers have effectively conceded that they were not likely to prevail in an upcoming fight over an injunction and will instead try to beat the states at trial.
“I think they saw the writing on the wall,” California Attorney General Rob Bonta told Variety on Friday. “They saw that the outcome of a motion for a preliminary injunction was a fait accompli. The die was cast. They were going to lose. Otherwise, why not challenge it?”
David Ellison, Paramount Skydance‘s chairman and CEO, had hoped to win a ruling denying the injunction by mid-September — allowing him to close the deal in time to avoid paying Warner Bros. shareholders millions of dollars a day. His lawyers pushed for a three-day evidentiary hearing in late August, where they could confront the states’ expert economist and undermine the states’ argument that the deal will result in illegal market concentration.
But in a ruling on Thursday, Judge Araceli Martinez-Olguin denied Paramount’s bid to speed up briefing on that request, signaling she was not inclined to go along with the multiday hearing. The judge had already granted a 28-day restraining order, finding that the states had made a “strong showing” that the merger was likely to harm competition, and the standard to get an injunction would be similar.
