Charlie Gasparino, Fox Business reporter, discusses 12 states suing to block the Paramount-Warner Bros. Discovery merger.
Paramount Skydance’s planned takeover of Warner Bros. Discovery hit a snag on Monday when a judge granted a temporary restraining order on the merger.
Paramount CEO David Ellison is seeking to acquire WBD in a $111 billion deal that was expected to close during the third quarter of this year, but California Attorney General Rob Bonta is leading a group of 12 state attorneys general who filed a lawsuit challenging the merger. The lawsuit claims the megadeal would “lead to higher prices, lower quality, and less content for film and television, harming movie theaters, basic cable distributors, and ultimately, audiences on every sofa and movie theater seat in the U.S.”
After a Friday hearing, California District Judge Araceli Martínez-Olguín approved the temporary restraining order, putting a 14-day pause on the merger and blocking closure of the transaction.
PARAMOUNT ADVISERS PUSH FOR CALIFORNIA EXIT AS STATE SUES TO BLOCK WARNER BROS DISCOVERY MERGER: REPORT
California Attorney General Rob Bonta believes Paramount’s planned takeover of Warner Bros. Discovery is simply “an illegal merger.” (AaronP/Bauer-Griffin/GC Images)
“Having read the papers filed by the parties and carefully considered their arguments therein and those made at the hearing, as well as the relevant legal authority, and good cause appearing, the Court GRANTS the motion for TRO,” the judge wrote.
The lawsuit, filed in the U.S. District for the Northern District of California, claims that the merger violates Section 7 of the Clayton Act, which holds that mergers that may substantially lessen competition or tend to create a monopoly are illegal. Both sides argued their case on Friday but Martínez-Olguín initially declined to make a ruling from the bench, instead taking the weekend to think it over.
| Ticker |
Security |
Last |
Change |
Change % |
| PSKY |
PARAMOUNT SKYDANCE CORP. |
8.75 |
-0.39 |
-4.27%
|
| WBD |
DISCOVERY INC. |
25.93 |
-0.94 |
-3.48%
|
|
“Because the Plaintiff States raise serious questions on the merits of their Clayton Act claim and because the balance of equities and public interest tip sharply in favor of the Plaintiff States, the Court ultimately finds the public interest favors their requested TRO to stay the merger in the interim,” the judge wrote.
“Defendants are temporarily enjoined and restrained from closing or consummating the Transaction or taking any steps, directly or indirectly, to integrate or consolidate their operations pursuant to the Transaction,” Martínez-Olguín continued. “This Order extends to Defendants’ agents, officers, servants, employees, attorneys, and other persons who are in active concert or participation with Defendants.”
Plaintiffs’ motion for preliminary injunction is due by July 23, the Defendants’ opposition brief is due by July 27, and the Plaintiffs’ reply is due by July 30. A hearing on Plaintiffs’ preliminary injunction motion at 3:00 p.m. on Monday, August 3.
WARNER BROS DISCOVERY SHAREHOLDERS APPROVE PARAMOUNT SKYDANCE DEAL
California Attorney General Rob Bonta. (Sarah Reingewirtz/MediaNews Group/Los Angeles Daily News via Getty Images / Getty Images)
“My office and attorneys general nationwide have secured an emergency order blocking the unlawful merger of Warner Bros. and Paramount. This is a critical first win in our case to ensure this megamerger never sees the light of day,” Attorney General Bonta said in a statement.
“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,” Bonta continued. “With our lawsuit, we’re fighting for a free and fair market and a thriving film and television industry that serves creatives and audiences alike. We have a full tank of gas, the law on our side, and look forward to continuing to make our case.”
Paramount said it is grateful for the court’s swift order on the motion.
“Like the timing agreement to which we were willing to stipulate, this TRO preserves the status quo while the Court considers the antitrust issues presented,” a Paramount spokesperson told Fox News Digital.
“We are confident the evidence will demonstrate that the State AGs’ antitrust arguments are without merit as their alleged markets and claims of anticompetitive effects are without any basis in modern market realities,” the spokesperson continued. “This merger is lawful, pro-competitive, and will benefit consumers, creators, workers, and the entertainment industry. We will continue to vigorously defend the transaction and will look forward to the hearings on the substance of the State AGs’ action.”
The Justice Department (DOJ) announced last week it has closed its antitrust investigation into Paramount Skydance’s proposed acquisition of WBD, concluding the transaction is not likely to harm competition or American consumers.
CALIFORNIA AG BLASTS PARAMOUNT-WBD MERGER AS ‘ILLEGAL,’ SAYS THREAT TO LEAVE STATE IS ‘BLACKMAIL’ EFFORT
FOX Business Charlie Gasparino breaks down the Paramount-Warner Bros. Discovery merger lawsuit on The Big Money Show.
The Antitrust Division said its eight-month review examined more than two million documents and found the deal could strengthen competition across the media and entertainment industry, including in streaming video, traditional television and theatrical film distribution. However, state attorneys general retain independent authority under antitrust laws.
Ellison, the son of billionaire Oracle co-founder Larry Ellison, took control of Paramount last year when Skydance Media and Paramount Global completed an $8 billion merger. Adding WBD to his portfolio would make the younger Ellison one of Hollywood’s most powerful people.
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