Judge pauses Paramount-Warner Bros Discovery merger

A US District Judge has issued a 14-day temporary restraining order that pauses the proposed $110 billion merger of Paramount and Warner Bros Discovery.

A dozen states secured the antitrust pause. California, Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington sued one week ago to block the deal for 28 days. The states argued the new media behemoth would harm competition and that irreversible steps such as layoffs and information sharing could begin once the merger closes.

US District Judge Araceli Martínez-Olguín partially granted the request. She ruled that based on the new company's market share the court can presume the proposed merger is likely to violate antitrust laws. The states also demonstrated that irreparable harm could occur without the temporary restraining order.

The order sets an August 3 hearing. The 14-day restraining order runs from July 20. A hearing on the preliminary injunction is scheduled for August 3.

Paramount faces daily penalties for delay. If the deal has not closed by September 30, Paramount will owe Warner Bros Discovery investors millions of dollars per day based on the length of the delay. The payment structure was part of the agreement that let Paramount outbid Netflix's $83 billion offer.

The judge's decision follows the states' last-ditch legal effort to stop the transaction. The Writers Guild of America has also sued to block the merger. Oregon's attorney general previously withdrew from the delay effort.