US judge pauses $111bn Paramount-Warner deal amid lawsuit
A federal judge has temporarily halted David Ellison’s $111 billion takeover of Warner Bros. Discovery, throwing a landmark media merger into uncertainty over global antitrust concerns.
A US federal judge has issued a 14-day pause on the proposed $111 billion merger between Paramount and Warner Bros. Discovery. The freeze, ordered by Judge Araceli Martínez-Olguín on July 13, follows a lawsuit filed by a coalition of 12 state attorneys general aiming to block the transaction.
The lawsuit argues the mega-merger would severely damage competition, harm movie theaters, and drive up subscription prices. The coalition is spearheaded by California Attorney General Rob Bonta, who noted that the state's Department of Justice has an open investigation and intends to be “vigorous in our review.”
The legal intervention disrupts a monthslong Hollywood bidding war that saw Paramount beat out streaming giant Netflix. In February, Netflix walked away from negotiations after Paramount raised its all-encompassing bid to $31 per share. “The transaction we negotiated would have created shareholder value with a clear path to regulatory approval,” Netflix co-CEOs Ted Sarandos and Greg Peters said. “However, we’ve always been disciplined, and at the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive, so we are declining to match the Paramount Skydance bid.”
The proposed takeover is backed by a $54 billion debt commitment from major financial institutions, including Apollo Global Management, alongside $45.7 billion in equity from Oracle chairman Larry Ellison. The combined entity would absorb roughly $33 billion in Warner's existing debt. For European investors and global markets, the creation of a media behemoth carrying roughly $87 billion in total liabilities signals a highly leveraged gamble on the future of the entertainment economy.
Beyond financial and antitrust concerns, the transaction is heavily clouded by political interference. Donald Trump has personally sought concessions from the involved news divisions, including securing a $16 million settlement from CBS and pressuring Netflix to fire former Biden White House official Susan Rice from its board. Meanwhile, Paramount CEO David Ellison has warned of significant job reductions, compounding existing anxieties among Warner employees at networks like CNN.
The merger originally received clearance from the US Department of Justice in June. The transaction is now paused until at least August 3, when a court hearing will determine whether the judicial freeze extends further.
