A federal judge has temporarily blocked Paramount’s $110 billion acquisition of Warner Bros. Discovery from moving forward after a group of states, led by California, argued in court that the merger would lead to job losses and less competition in the entertainment industry.
On July 20, as reported by Reuters, U.S. District Judge Araceli MartÃnez-OlguÃn of the Northern District of California issued a temporary restraining order against Paramount. The company is not allowed to finish the merger that would see Paramount and Warner Bros. join into a massive entertainment conglomerate featuring two classic movie studios, multiple streaming platforms, and more. And all of it would be controlled by CEO David Ellison, the rich, failed actor son of tech mogul Larry Ellison.
The restraining order will remain in place for 14 days. A hearing has been set for August 3 to address the 12 states and their motion for a preliminary injunction, which, if granted, would freeze the merger while the companies take on the states in court.
On July 13, California and 11 other states sued Paramount to stop the massive merger. The states argue it could create a massive company that would have too much power to raise prices and disrupt the media landscape and its workers. They believe the deal must be paused because if it is allowed to go through and WB and Paramount start making cuts and sharing sensitive info with each other, it will be harder to undo the damage if the merger is later found to be illegal in court.
âThe unlawful merger of these two entertainment behemoths 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.,â said California Attorney General Rob Bonta in a statement about the court filing.
Meanwhile, Paramount says the state’s legal arguments are wrong and has pushed back against the lawsuit, with the company explaining in a statement that it will “vigorously defend the transaction and demonstrate that this challenge is inconsistent with sound competition policy and the competitive realities of the media marketplace.”
While many online and around the country aren’t happy about how the merger could affect the entertainment industry, there’s also the political baggage. Larry Ellison is a close ally of President Donald Trump. And the president has publicly and frequently praised the Ellison family while demanding new ownership of CNN, a news network owned by WB. Meanwhile, David Ellison has instituted many changes at CBS News, most infamously hiring Bari Weiss to overhaul the network’s evening news output, leading to a lot of embarrassing bullshit.