Provpnadvice.com – A judge in California has put Paramount’s planned takeover of Warner Bros. Discovery on hold while the court considers a sweeping antitrust lawsuit challenging the multibillion-dollar transaction, which was brought against the company last week.
Judge Araceli Martínez-Olguín granted a request from California Attorney General Rob Bonta that the merger be paused for two weeks while she considers whether to hear a case he and 11 other state attorneys general are pursuing, which seeks to kill the merger on antitrust grounds.
“This is a critical first win in our case to ensure this megamerger never sees the light of day,” Bonta said in a statement. “History tells the tale of 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.”
The group of state AGs argued as part of its suit that the Paramount-Warner Bros. Discovery deal would hurt competition in the business of media and entertainment, “creating a massive company with unprecedented power and influence over news and entertainment across the globe.”
Paramount is owned by billionaires Larry and David Ellison, the father-son duo and Trump allies who have made sweeping changes to CBS News, including its editorial direction.
Warner Bros. Discovery is one of the largest entertainment and news companies in the world, with major brands like Turner Sports and CNN under its portfolio.
Critics of the deal, including several Democrats on Capitol Hill, have argued that allowing the merger to clear would give the Ellisons too much control of the media sector and could impact the editorial direction of CNN.
Trump has for years sparred with the cable news channel, praised the Ellisons’ publicly and said he wishes to see CNN operate under new ownership .
Paramount late last week also faced a lawsuit from a press freedom group, filed on behalf of one of the company’s shareholders, seeking to stop, “Paramount insiders from profiting through breaches of their fiduciary duties to the company by trading editorial independence for favoritism from the Trump administration.”
The Ellison-led company pushed back that assertion in a statement to The Hill last week, with a spokesperson saying the deal “stands on its own merits,” and insisting “combining these two libraries and platforms gives consumers more choice, not less — greater investment in original programming, a stronger competitor to streaming rivals, and a more durable footing for journalism and storytelling alike.”
Paramount said on Monday it was “thankful” for the judge’s ruling, noting it “preserves the status quo while the Court considers the antitrust issues presented.”
“We are confident the evidence will demonstrate that the State AGs’ antitrust arguments are without merit as their alleged markets and claims of anticompetitive effects are without any basis in modern market realities,” a spokesperson for the company said. “This merger is lawful, pro-competitive, and will benefit consumers, creators, workers, and the entertainment industry. We will continue to vigorously defend the transaction and will look forward to the hearings on the substance of the State AGs’ action.”
