Judge Blocks Paramount-Warner Bros. Merger

A federal judge has issued a temporary restraining order blocking the $111 billion merger between Paramount Skydance and Warner Bros. Discovery. The ruling, issued by US District Judge Araceli Martínez-Olguín in the US District Court for the Northern District of California, prevents the companies from completing the deal or consolidating operations for 14 days.

The order follows a lawsuit filed last week by a group of 12 states, led by California. According to reporting from Ars Technica, the states argue that the merger would eliminate competition by combining two of the five major owners of basic cable TV channels and two of the five major Hollywood movie studios. California Attorney General Rob Bonta described the order as a critical win to ensure the "megamerger" is stopped.

Judge Martínez-Olguín stated that the states made a strong showing that the transaction would substantially lessen competition in the theatrical-film market. The judge noted that the merged entity would likely hold a 27 percent share of the wide-release theatrical distribution market. While courts typically presume a violation of antitrust law at a 30 percent share, Martínez-Olguín wrote that 30 percent is not the lowest threshold for a threat. She further cited a sharp increase in the Herfindahl-Hirschman Index (HHI), concluding that the merger is likely to enhance market power.

Despite the deal having been approved by the Trump administration, the judge ruled that the potential public harm—specifically the loss of competition—outweighed any near-term economic harm to the defendants. The companies conceded they would not incur carrying costs for a delay until late September 2026. A hearing for a preliminary injunction is scheduled for August 3, though Paramount may challenge the ruling in the US Court of Appeals for the 9th Circuit.