The Incorporation of Warner Bros. Discovery with Paramount may take longer than companies expect

By Sofia Ortiz

On the brink of the merge between the entertainment companies Warner Bros. Discovery and Paramount, a coalition of 12 state attorneys have filed a lawsuit to block the acquisition of Warner Bros. onto Paramount.

This Monday; Judge Araceli Martinez-Olguin has determined the temporary restraining order to Paramount and Warner Bros. Discovery at least for two weeks. Pausing the $81 billion that would be needed to complete the merger, and giving time to the states that are challenging this conversion to stop the companies and bring their case to court.

The coalition of states stipulates, the merge between this two big companies, violates the United States federal law against the antitrust law, who bans an anti-competitive conduct and mergers that deprive U.S. consumers, taxpayers, and workers of the benefits of competition. The 12 states attorneys calls on the reach that two of the largest film companies would have in the three main entertainment markets; theatrical film distribution—including major blockbusters—and the licensing of basic cable channels. According to the lawsuit, this merger could give the companies control over nearly one-third of the film market, arguing that this would give them enough power to raise prices for consumers and threaten workers' wages, while reducing production and the quality of content.

Similarly, the Writers Guild of America also filed its own lawsuit in an attempt to block the merger. This means Paramount is facing more than one legal battle, including the lawsuit filed by a shareholder who accuses CEO David Ellison and his father, Larry Ellison, of promising “illegal private benefits” to USA President Donald Trump in order to push the merger through.

“This is a crucial first victory in our case to ensure that this mega-merger never sees the light of day. History shows what happens when a few people wield immense power over markets that are central to the lives of Americans: fewer opportunities for more people, and worse products and services for everyone.” Says Rob Bonta, California’s attorney general. Paramount denies the allegations, and the U.S. Department of Justice maintained that its review was not politically motivated; furthermore, the company promises to defend its acquisition of Warner, highlighting the approvals the deal has received, such as the one granted by President Donald Trump’s administration last month.