A federal judge has temporarily blocked the proposed merger between Paramount and Warner Bros. Discovery, giving a coalition of Democratic state attorneys general an early courtroom victory after the Trump administration had already approved the deal.
On Monday, U.S. District Judge Araceli Martínez-Olguín issued a temporary restraining order preventing the companies from completing the merger or beginning to combine their operations for at least 14 days. A hearing on whether to issue a longer preliminary injunction is scheduled for Aug. 3.
Martínez-Olguín was nominated to the federal bench by former President Joe Biden and confirmed after then-Vice President Kamala Harris cast the tie-breaking vote in a 48-48 Senate split.
The proposed merger would create one of the largest entertainment companies in the world. Paramount’s agreement values Warner Bros. Discovery at approximately $81 billion in equity and roughly $110 billion including debt. The combined company would own Warner Bros., HBO Max, CNN, CBS, Paramount+, and two of Hollywood’s biggest movie studios.
The ruling is notable because the Trump administration’s Justice Department had already completed its antitrust review and approved the transaction in June. After investigating the deal, the department concluded it was unlikely to substantially reduce competition in streaming, traditional television, or theatrical film production and distribution.
California Attorney General Rob Bonta and attorneys general from 11 other Democratic-led states disagreed with that conclusion and filed suit to block the merger.
Bonta celebrated Monday’s ruling as an important step toward stopping the transaction altogether.
“This is a critical first win in our case to ensure this megamerger never sees the light of day,” Bonta said, arguing that excessive market concentration gives too much power to a small number of companies.
The lawsuit claims the merger would eliminate a significant competitor in theatrical movie distribution, blockbuster films, and cable television programming. According to the states, the combined company would control roughly 27 percent of the market for wide-release theatrical films.
At this stage, Judge Martínez-Olguín limited her analysis to that theatrical market. She concluded the states had presented enough evidence to justify keeping the companies separate while the legal challenge proceeds.
“Plaintiff States’ showing at least demonstrates that serious questions going to the merits remain, weighing in favor of preliminary injunctive relief,” she wrote.
According to the court, the states’ economic expert estimated the merger would increase market concentration by 359 points, resulting in an index of 2,074. While Paramount disputed the way the market was defined, the company did not present an alternative calculation.
Paramount has argued that the entertainment landscape has changed dramatically and now includes powerful competitors such as Amazon MGM and A24. The company also contends that combining with Warner Bros. Discovery would create a stronger rival to streaming giants like Netflix and Amazon.
The judge was not persuaded by that argument. In a footnote to her ruling, Martínez-Olguín wrote that any potential benefits in the streaming market could not offset concerns about reduced competition in theatrical film distribution.
Paramount responded by defending the transaction.
“This merger is lawful, pro-competitive, and will benefit consumers, creators, workers, and the entertainment industry,” the company said in a statement. “We will continue to vigorously defend the transaction.”
The judge also explained why she believed an immediate pause was necessary. If the companies were allowed to merge before the court reached a final decision, they could begin sharing confidential business information, consolidating operations, and restructuring their workforce. Undoing those changes later, if the merger were ultimately found unlawful, could prove difficult or even impossible.
The ruling also noted that Paramount had acknowledged a brief delay would not immediately cause financial harm. According to the court, the company is not expected to begin incurring significant costs from a postponed closing until the end of September.
For now, the merger remains on hold despite having already received approval from the federal government.
