The $110 billion deal between Paramount and Warner Bros. has been put on hold. What's next?

A federal judge has temporarily halted Warner Bros. Discovery’s $110 billion acquisition of Paramount Skydance, Bloomberg reported. Earlier, attorneys general from 12 states—led by California Attorney General Rob Bonta— filed a lawsuit against the deal: In their view, the merger of two of the five largest U.S. film studios would harm competition in the film distribution and cable television sectors.

Against this backdrop, U.S. District Judge Araceli Martinez-Olgin of Oakland ordered the companies on July 20 to postpone the closing of the deal by 14 days. Paramount and Warner Bros. had hoped to complete the merger as early as July 22.

The next hearing in the case is scheduled for August 3—at which time the court will decide whether to extend the ban on the merger between Paramount and Warner Bros. indefinitely while the antitrust lawsuit is pending, explains The Wall Street Journal. The proceedings could take several months, notes Reuters.

Paramount's stock fell 1.66% following this news, and Warner Bros. shares are down by roughly the same amount. Representatives from Paramount and the California Attorney General's Office did not immediately respond to Bloomberg's requests for comment.

According to an antitrust lawsuit filed by prosecutors from 12 U.S. states in federal district court, the deal between Paramount and Warner Bros. is alleged to allow the combined company to control 27% of the total market for theatrical film releases, as well as 30% of blockbusters with large production budgets. The plaintiffs argue that all of this will allow Paramount and Warner Bros. to raise prices for film and television services.

Paramount has previously stated that the lawsuit misinterprets established antitrust law, and that delays in closing the deal will only harm entertainment industry workers, who have been suffering from upheavals in the industry for many years, Reuters reports.

However, a prolonged pause could cause financial damage to Paramount itself, the agency notes: the merger agreement the companies signed in February stipulates that Paramount has until June 4, 2027, to finalize the deal with Warner Bros., — but from September 30 until the deal is finalized, the studio will have to pay Warner Bros. shareholders a fee of $0.25 per share for each calendar day of the “pause,” or about $7 million per day.

This article was AI-translated and verified by a human editor