US judge orders pause on Paramount–Warner Bros merger
A US judge has halted the proposed merger between Paramount Skydance and Warner Bros Discovery after a lawsuit by 12 states alleging anti-competitive effects. The court gave states 14 days to argue, with a hearing set for August 3.
On Monday, U.S. District Judge Araceli Martinez-Olguin ordered a pause on the merger between Paramount Skydance and Warner Bros Discovery in response to a lawsuit filed by a coalition of 12 states led by California. The states argue the deal would reduce competition, limit content availability, and lead to mass layoffs.
The judge granted the states 14 days to present their case merits, with a hearing on the pause request scheduled for August 3. A final ruling could take months.
Under the merger agreement's terms, if the deal is delayed beyond September 30, Paramount must pay $650 million per quarter in ticking fees, plus a 25-cent-per-share fee, roughly $7 million daily.
The merger has faced criticism from Hollywood and Washington, with concerns that combining CBS News and CNN under one roof would reduce viewpoint diversity. Internally, fears exist that Paramount's Larry Ellison, a close Trump ally, and his son David could bring changes to CNN similar to those at CBS, including hiring right-wing commentator Bari Weiss.
Reports of Weiss potentially shaping CNN have prompted some top talent to consider leaving. Paula Reid has moved to MS Now, and Anderson Cooper has reportedly floated leaving if Weiss takes over.
Media freedom experts warn the merger would harm access to diverse viewpoints. NYU professor Rodney Benson said it would set a dangerous precedent by favoring media owners who generate coverage pleasing to the president, reducing consumer choice and increasing government-tied news.
The Writers Guild of America also filed a lawsuit last week to block the merger, alleging it would eliminate competition and threaten workers' livelihoods.
Paramount Skydance's stock initially tumbled but rebounded, while Warner Bros Discovery's stock fell 3.8% in midday trading.
