The planned acquisition of Warner Bros. Discovery by Paramount and Skydance has been temporarily halted following a lawsuit filed by a coalition of 12 state attorneys general. The coalition, led by California Attorney General Rob Bonta, argued that the merger would violate federal antitrust law and could lead to increased prices for film and television content.
Judge Araceli Martinez-Olguin issued a two-week pause on the acquisition, which could be extended to 28 days. Paramount and Skydance had originally anticipated closing the deal on July 22. In her ruling, Martinez-Olguin stated that the plaintiffs "showing at least demonstrates that serious questions going to the merits remain, weighing in favor of preliminary injunctive relief." She added that "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 described the ruling as a "critical first win" for the coalition, while Paramount Skydance maintained that the lawsuit presents 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 stated.
Paramount Skydance has argued that acquiring Warner Bros. Discovery would enhance its ability to compete with major players like Disney and Netflix. Should the deal proceed, Paramount Skydance would gain control of Warner Bros. Games, including valuable intellectual property such as Hogwarts Legacy and Mortal Kombat. This would add these properties to Paramount's existing game development arm, Paramount Games Studio, which has several projects in development, including a Star Trek horror game from Bloober Team, Marvel 1943: Rise of Hydra, and Avatar Legends: The Fighting Game.
Previously, Netflix had considered acquiring Warner Bros. Discovery for $82.7 billion, but withdrew from the race following lobbying efforts and a higher bid from Paramount Skydance. The current legal challenge now casts uncertainty over the future ownership of these gaming assets and the broader Warner Bros. Discovery portfolio.
