Warner Bros. Acquisition Is Stuck In Legal Limbo Again

Paramount Skydance’s plan to acquire Warner Bros. Discovery has hit yet another snag, as a judge has issued a two-week pause on its planned acquisition. After a coalition of 12 state attorneys–led by California Attorney General Rob Bonta–argued that the merger would violate federal antitrust law and potentially lead to higher film and TV prices, Judge Araceli Martinez-Olguin placed a temporary pause on the merger.

The order could be extended from 14 to 28 days, and Paramount Skydance was originally expecting to close the deal on July 22 (via Variety). “Plaintiff States’ showing at least demonstrates that serious questions going to the merits remain, weighing in favor of preliminary injunctive relief,” Martinez-Olguin said. “Paramount and Warner Bros. will continue to operate as separate, viable companies competing in the marketplace while they wait for the Court to adjudicate this case.”

Bonta labeled the ruling as a “critical first win” in the coalition’s case (via NBC News), while Paramount Skydance has continued to insist that the lawsuit represents a “fundamentally flawed application” of antitrust laws. “With our lawsuit, we’re fighting for a free and fair market and a thriving film and television industry that serves creatives and audiences alike. We have a full tank of gas, the law on our side, and look forward to continuing to make our case,” Bonta said.

Paramount Skydance claims that acquiring Warner Bros. Discovery will allow it to better compete with the likes of Disney and Netflix, and in addition to all the film IP, studios, sports properties, and television networks it’ll gain if the deal passes, it’ll also take control of Warner Bros. Games.

This would mean that Paramount Skydance would become the new owner of valuable video game IP like Hogwarts Legacy and Mortal Kombat, which could join its new in-house game development studio, Paramount Games Studio. The new arm of Paramount Skydance already has several projects in development, including a Star Trek horror game from Silent Hill 2 remake developer Bloober Team, Marvel 1943: Rise of Hydra, and Avatar Legends: The Fighting Game.

Originally, Netflix had planned to acquire Warner Bros. Discovery for $82.7 billion last year, but aggressive lobbying and a higher bid by Paramount Skydance saw the streaming giant pull out of the race.