Judge says Paramount and Warner must halt merger for at least two weeks
A federal judge pauses Paramount and Warner's $81 billion merger for two weeks amid antitrust challenges from twelve states.
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Twelve States sued to block Paramount's pending buyout of Warner last week, alleging that such a combination would “extinguish competition” in Hollywood and lead to fewer choices for consumers
Updated - July 21, 2026 04:52 pm IST - New York
A Warner-Paramount tie-up would bring together two of the five last legacy studios in Hollywood, as well as a host of TV networks, titles filling streaming libraries and news operations. File | Photo Credit: Reuters
A Federal Judge on Monday (July 20, 2026) ordered Paramount and Warner Bros Discovery to halt their $81 billion merger for at least two weeks, allowing States that are challenging the deal more time to see their case through in Court.
Twelve States, led by California, sued to block Paramount's pending buyout of Warner last week, alleging that such a combination would “extinguish competition” in Hollywood and lead to fewer choices for consumers, particularly moviegoers and cable customers across the U.S.
The States' top prosecutors called on Warner and Paramount to not close the transaction until after a court had time to fully evaluate their claims. And when the companies refused, they filed for a temporary restraining order — which is what District Judge Araceli Martinez-Olguin granted on Monday (July 20, 2026). That opens the door to a potential preliminary injunction that the States are also seeking to effectively block the deal.
“This is a critical first win in our case to ensure this megamerger never sees the light of day,” California Attorney General Rob Bonta said in a statement. "What happens when a few people have great power over markets that are central to Americans' lives: fewer opportunities for more people, worse products and services for all people.”
A Warner-Paramount tie-up would bring together two of the five last legacy studios in Hollywood — as well as a host of TV networks, titles filling streaming libraries and news operations. Warner's HBO Max, fan favourites like “Harry Potter” and even CNN would come under the same roof of Paramount-owned CBS, movies like “Top Gun” and the Paramount+ streaming service.
Paramount, which was bought out by Skydance just last year, has vowed to vigorously defend its acquisition — and touts regulatory greenlights the deal has received elsewhere, including from President Donald Trump's administration last month.
On Monday (July 20, 2026), Paramount said the States' antitrust arguments “are without merit” or “any basis in modern market realities" — and maintained that its merger with Warner will benefit consumers and workers alike. Timing for next steps also falls in line with the company's previous requests.
Deal is paused for at least two weeks. The temporary restraining order granted Monday (July 20, 2026) halts the deal from progressing for at least 14 days, although the pause could be extended for up to 28 days. The court has set August 3 as a date for a hearing on the States' preliminary injunction motion, but the schedule could also be pushed back.
The clock is ticking. Ahead of Monday's (July 20, 2026) decision, the companies proposed wrapping up a preliminary injunction hearing by the end of August, leaving time to make a possible appeal by September 30 — a date on the top of Paramount's mind because it's pledged to pay shareholders added “ticking fee” compensation amounting to about $7 million per day if the deal isn't closed by then.
But the States called such a timeline unprecedented and unfair. They maintain that payments Paramount might have to incur after September 30 were the risk of a decision the company made on its own — and argued in a hearing held Friday (July 17, 2026) that commencing a trial in April 2027 would allow enough time for discovery and presenting proper evidence.
Including billions of dollars in debt, Paramount's proposed purchase of Warner is currently valued at nearly $111 billion based on outstanding shares.
What the States are challenging. Paramount has repeatedly pointed to tech and streaming companies' growing reach across the entertainment industry — and argues that merging with Warner would particularly help it compete with bigger rivals like Netflix. Last week, it said the States' challenge would help shield Netflix and others “who have harmed the market for theatrical exhibition” from meaningful competition.
