Paramount Skydance emerged victorious in the bidding war for Warner Bros. Discovery, forcing Netflix to withdraw from the competition. However, a judge has temporarily halted the deal.
Twelve US state attorneys general sought a temporary restraining order to prevent Paramount Skydance from finalizing the acquisition. US District Judge Araceli Martinez-Olguin from the Northern District of California granted this request.
As a result, the deal is effectively on hold for the next 14 days. A hearing is scheduled for August 3, where the judge will consider the state attorneys general's motion for a preliminary injunction, which could freeze the deal until the trial concludes.
The plaintiffs, led by California Attorney General Rob Bonta, filed a lawsuit on July 13 to block the merger. They argue that the merger would "extinguish competition" in Hollywood, resulting in higher prices, lower quality, and less content for film and television. Bonta and his colleagues contend that the transaction violates federal laws designed to prevent significant reductions in competition.
In response, Paramount Skydance expressed confidence in the legality of the merger. A representative stated to NBC News: "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 lack any basis in modern market realities."
While the deal has previously received approval from the US Justice Department and regulatory bodies in Australia and China, it may face more challenges in obtaining clearance from the EU and the UK.
