California and 11 other states have filed temporary restraining orders and preliminary injunctions to prevent Paramount and Warner Bros. from completing the deal while the states pursue their antitrust lawsuits.
In a motion filed Monday night, the states asked a federal judge to act by July 22. Paramount had previously notified states that it would not complete the deal before that date.
“This transaction eliminates competition between Paramount and Warner Bros. and allows the combined company to increase prices and reduce production,” the motion states. “Plaintiff states have an interest in antitrust enforcement, and without an injunction, their citizens face a risk of serious and irreparable harm.”
The states filed suit on the same day, alleging that the $111 billion deal violates federal antitrust laws in three markets: wide theatrical distribution, blockbuster film distribution, and basic cable television distribution. The states argued that the agreement harmed not only consumers but also theater owners and cable and satellite broadcasters.
Paramount Skydance quickly responded, saying the states had a “fundamentally incorrect” understanding of the facts and law.
“Delaying this deal will only harm Californians who have already suffered in recent years due to technology, costing tens of thousands of entertainment jobs,” the company said in a statement.
To obtain an injunction, states must convince a judge that their lawsuit has a chance of success and that without an injunction, they would suffer “irreparable harm.” States argue that if a deal is approved and later determined to be illegal, it would be impossible to “unscramble the egg” at that point.
California’s attorney general’s office announced earlier Monday that it would seek an injunction if Paramount does not agree to suspend the merger while the lawsuit is pending. As expected, the company did not agree to this, leading to the current application.
“These industry giants should not move to merge until the courts properly evaluate our claims,” Attorney General Rob Bonta said in a statement Monday night. “Today, I, along with a coalition of attorneys general, filed an emergency motion asking the court to immediately halt this merger. I will not let Warner Bros. and Paramount merge without a fight.”
An injunction ruling would be an early test of the strength of each state’s case. In March, a similar coalition was able to obtain an order blocking the Nexstar-Tegna merger from taking effect. This judgment is currently under appeal.
