Paramount Skydance’s proposed $110 billion takeover of Warner Bros. Discovery has been temporarily put on hold after a federal judge ruled that the transaction cannot move forward until at least August 3.
The decision came after California and 11 other states challenged the merger, warning that the combined company could wield excessive influence over the film distribution market and potentially lead to higher costs for consumers and greater pressure on theatres.
U.S. District Judge Araceli Martínez-Olguín said the states had made a strong preliminary case that the deal could unlawfully reduce competition. She also noted that allowing the acquisition to close before the antitrust case is resolved could trigger changes that would be difficult to reverse, including job cuts and the exchange of sensitive business information.
The court will hold a hearing on August 3 to decide whether the deal should remain blocked for the duration of the lawsuit, a process that could continue for months.
The states have argued that the merger could give the combined company control over roughly 27% of the market for widely released films, potentially strengthening its bargaining power with theatre operators.
Paramount Skydance has rejected the allegations, maintaining that the states’ antitrust claims do not reflect current realities in the film industry. The company has pointed to the growing presence of technology giants such as Amazon and Apple as evidence of increasing competition.
The legal fight also carries a potentially steep financial cost for Paramount Skydance. Under the merger agreement, if the transaction remains unfinished beyond September 30, CEO David Ellison could be required to pay Warner Bros. shareholders a “ticking fee” of 25 cents per share for every day of delay—amounting to approximately $7 million daily.
The ruling represents an early setback for Ellison’s ambition to reshape Paramount Skydance into a larger rival to streaming and entertainment giants such as Netflix and Disney.
