Judge pauses Paramount Warner Bros. acquisition over competition concerns

U.S. District Judge Araceli Martínez-Olguín ordered Paramount Skydance to pause its acquisition of Warner Bros. Discovery through August 3 after several U.S. states argued the merger would harm competition.

Martínez-Olguín said the group of states, which included California, New York, Colorado, and others, made a “strong showing” that the merger would decrease competition.

A hearing on August 3 will determine whether the deal should be delayed throughout the course of the lawsuit, according to Reuters.

A coalition of 12 states sued earlier this month, arguing the massive US$110 billion (roughly C$154.7 billion) acquisition would create a media giant with the power to raise prices across film and television.

However, Paramount maintains that the states’ arguments are “without merit,” Martínez-Olguín says the deal looks likely to violate antitrust law.

Further, the merger has far-reaching implications that extend beyond the U.S. Canada’s Competition Bureau is analyzing the acquisition, as Warner Bros. has extensive business in Canada. That includes shooting many of its shows here, including The Last of Us and the ‘Arrowverse’ DC titles like Arrow and The Flash.

There could be significant impacts on the Canadian streaming market as well. Much of the HBO content available in Canada is on Bell’s Crave platform, since HBO’s streaming service isn’t available in Canada. Bell has said Warner Bros. programming will stay on Crave “for the foreseeable future,” but didn’t clarify how long its current licensing deal will last.

Moreover, there are political concerns with the merger. Paramount Skydance owner David Ellison and his father, Oracle-owner Larry Ellison have close ties to U.S. President Donald Trump.

We’ve already seen Ellison direct changes to benefit Trump, including picking political commentator Bari Weiss as editor-in-chief of CBS News and firing journalists at 60 Minutes. Ellison reportedly promised Trump there would similar changes to CNN should the deal go through. Elsewhere, Paramount reportedly greenlit projects like Rush Hour 4 just to please Trump.

Beyond the Ellisons, the Paramount bid’s Saudi Arabia backing drew criticism, given the Saudi government infamously ordered the murder of Washington Post journalist Jamal Khashoggi after he criticized the regime. In a similar vein, Saudi Arabia is backing a Trump-linked takeover of Electronic Arts (EA), all part of a broader push to rebrand the country’s image.

Source: Reuters