Category: News

State attorneys general are now seeking a temporary restraining order and preliminary injunction to pause Paramount‘s proposed merger with Warner Bros. Discovery, warning that the company may otherwise close the transaction as soon as July 22.

That date is around the time that the European Union is expected to issue its decision on the transaction, with the U.S. Justice Department having already cleared the deal.

The motion for a temporary restraining order was filed in federal court in Sacramento late on Monday. If granted, the TRO would temporarily pause the transaction as the legal proceedings take place.

In their lawsuit filed earlier in the day, California Attorney General Rob Bonta and 11 other state attorneys general argued that the merger would give Paramount leverage to harm competition for wide release theatrical distribution, anticipated top grossing film releasing, and basic cable channel licensing.

In their motion, the states argued that they have met the threshold for a TRO and preliminary injunction, including the risk of irreparable harm without swift court action and that they had a likelihood of success on the merits.

The state AGs wrote that the merger “will increase market concentration to presumptively unlawful levels in three relevant antitrust markets. Once consummated, layoffs, content cancellations, and harms to competition would commence immediately. If the Court subsequently determines that the Transaction is unlawful, it will then be ‘extraordinarily difficult to unscramble the egg’ and ‘too late to preserve competition if no preliminary injunction has issued.’” 

Paramount responded to the lawsuit with a statement saying that it “reflects a fundamentally flawed application of the antitrust laws and is wrong on both the facts and the law.”

“We will vigorously defend the transaction and demonstrate that this challenge is inconsistent with sound competition policy and the competitive realities of the media marketplace. Delaying this transaction will only harm entertainment workers who have already suffered over recent years as technology has disrupted their livelihood and cost California tens of thousands of entertainment jobs.”

Per court documents, among those representing Paramount in the proceedings is Daniel Petrocelli, the litigator who successfully fought a federal antitrust challenge to AT&T’s acquisition of Warner Bros. in 2018. That case was brought by Makan Delrahim, then antitrust chief at the DOJ who is now chief legal officer for Paramount.

In the motion for a TRO, the AGs said that Paramount declined to pause the merger until the court ruled on the merits. The AGs also argued that there would be “no cognizable harm” to Paramount or Warner Bros. to a pause as the case is adjudicated.

The AGs wrote, “The merger agreement sets an outside date of March 4, 2027, which automatically extends to June 4, 2027 if antitrust review is still pending. The agreement also imposes a $7 million daily ticking fee on Paramount beginning September 30, 2026. The Defendants thus agreed to an outside date that contemplates more than eight months of accumulated ticking fees as part of the price of completing a transaction that might face antitrust scrutiny. Paramount’s interest in completing the Transaction now to spare it the costs of its own agreement is not a cognizable equity interest.”

Bonta was among the state AGs who won a temporary restraining order and preliminary injunction that has paused Nexstar’s proposed merger with Tegna, creating a broadcast station powerhouse. The case is on appeal, but the companies have to remain separate as the legal fight proceeds.

Paramount CEO David Ellison was meeting on Monday with members of the House Ways & Means Committee to promote a federal film tax incentive, sources said.

Ellison and Chief Legal Officer Makan Delrahim were among those meeting with the lawmakers. The idea of establishing a more robust federal incentive has drawn support from members on both sides of the aisle, amid concerns over the flight of productions overseas.

The Ellison meeting is taking place on the same day that California’s attorney general, Rob Bonta, led 11 other states in suing to block Paramount’s proposed merger with Warner Bros. Discovery. Paramount has said that the combination actually would boost a needed rival to Netflix, but the lawsuit claims that it will give the company more market power to extract favorable terms from theatrical exhibitors and cable distributors.

Sen. Adam Schiff (D-CA) has been working on legislation, but has not yet introduced a bill. He said in March that “state programs simply cannot substitute for the kind of globally competitive federal tax incentive that is needed to bring production back to American soil and stop its offshoring.”

Representatives from guilds and unions also have been lobbying for a federal incentive, along with figures like Noah Wyle and producer Chris Fenton. Politico first reported on Ellison’s meeting.

A challenge for any incentive bill would be the legislative calendar this year, as lawmakers have just a couple of weeks before summer recess, then return to face another end-of-fiscal year government funding deadline on Sept. 30. Congress is expected to be out of session in October for midterm campaigns.

Lobbying for an incentive has picked up since President Donald Trump threatened to try to impose tariffs on film productions, although there is some question of whether he has the authority or means to do so. Industry groups have instead tried to direct the administration to the carrot rather than the stick, urging the president to consider an incentive instead.

At the recent Mark Twain Prize at the Kennedy Center, Secretary of Commerce Howard Lutnick told Deadline that the administration is still studying the issue, while noting the bevy of state film incentives. For years, different states have been in a race to offer the more generous incentive packages, hoping to lure productions from California, but increasingly concerns have centered on jobs going to other countries.

“The federal government is a national thing, and the states are particular, and you got to find the right balance,” Lutnick said. “We are a country with federal laws and state laws, and trying to find the right balance, that that’s what we’re studying.”

UPDATED, with comment from AG: Oregon‘s attorney general has dropped a civil investigative demand for Paramount to turn over records related to its efforts to secure federal approval for its merger with Warner Bros. Discovery.

Oregon Attorney General Dan Rayfield also had asked a state circuit court judge to order Paramount to turn over the materials and to delay Paramount’s closing of its proposed acquisition of Warner Bros. Discovery by 60 days so the documents could be reviewed. A hearing has been scheduled for Monday in Multnomah County Circuit Court.

A Paramount spokesperson said, “We are pleased that the Oregon Attorney General has withdrawn its motion to delay this transaction. It was the right decision and avoids an unwarranted effort to delay a lawful, pro-competitive merger.

“Antitrust authorities around the world have carefully reviewed this transaction, clearing it or concluding that it does not violate any competition laws. That regulatory record underscores what the facts, the law and the economics make clear: this transaction will create a stronger challenger to dominant global streaming and technology platforms, expand consumer choice, increase investment in premium content and theatrical distribution, and create more opportunities for creators and workers. We look forward to completing the transaction and delivering those benefits.”

Jenny Hansson, communications director for Rayfield, said in a statement, “Paramount made it clear that they weren’t going to comply with the investigative demand, and that they think they’re above the law. We’re not going to let them waste Oregonians’ resources on these games. We’ve withdrawn the motion to consider our next steps.”

California Attorney General Rob Bonta and other state attorneys general are said to be considering a legal challenge to the transaction.

Rayfield sought Paramount records of lobbying of federal officials, as well as its role in a statement that the DOJ released in support of the transaction. The attorney general also sought documents “related to the formulation and execution of lobbying strategies aimed at obtaining regulatory approval of the proposed merger, which Respond as internally named ‘Project Warrior.’”

In a court filing, Paramount has objected to the document requests, arguing, among other things, that they impose “burdens and demands which are disproportionate” to the Oregon investigation and are “of such marginal relevance that the value of any materials sought is outweighed by the burden imposed on Paramount in having to provide such information.”

“Lobbying activities and related communications are wholly irrelevant to whether the proposed acquisition ‘violates Oregon’s antitrust laws,’” the company’s legal team wrote.

UPDATED, with comment from AG: Oregon‘s attorney general has dropped a civil investigative demand for Paramount to turn over records related to its efforts to secure federal approval for its merger with Warner Bros. Discovery.

Oregon Attorney General Dan Rayfield also had asked a state circuit court judge to order Paramount to turn over the materials and to delay Paramount’s closing of its proposed acquisition of Warner Bros. Discovery by 60 days so the documents could be reviewed. A hearing has been scheduled for Monday in Multnomah County Circuit Court.

A Paramount spokesperson said, “We are pleased that the Oregon Attorney General has withdrawn its motion to delay this transaction. It was the right decision and avoids an unwarranted effort to delay a lawful, pro-competitive merger.

“Antitrust authorities around the world have carefully reviewed this transaction, clearing it or concluding that it does not violate any competition laws. That regulatory record underscores what the facts, the law and the economics make clear: this transaction will create a stronger challenger to dominant global streaming and technology platforms, expand consumer choice, increase investment in premium content and theatrical distribution, and create more opportunities for creators and workers. We look forward to completing the transaction and delivering those benefits.”

Jenny Hansson, communications director for Rayfield, said in a statement, “Paramount made it clear that they weren’t going to comply with the investigative demand, and that they think they’re above the law. We’re not going to let them waste Oregonians’ resources on these games. We’ve withdrawn the motion to consider our next steps.”

California Attorney General Rob Bonta and other state attorneys general are said to be considering a legal challenge to the transaction.

Rayfield sought Paramount records of lobbying of federal officials, as well as its role in a statement that the DOJ released in support of the transaction. The attorney general also sought documents “related to the formulation and execution of lobbying strategies aimed at obtaining regulatory approval of the proposed merger, which Respond as internally named ‘Project Warrior.’”

In a court filing, Paramount has objected to the document requests, arguing, among other things, that they impose “burdens and demands which are disproportionate” to the Oregon investigation and are “of such marginal relevance that the value of any materials sought is outweighed by the burden imposed on Paramount in having to provide such information.”

“Lobbying activities and related communications are wholly irrelevant to whether the proposed acquisition ‘violates Oregon’s antitrust laws,’” the company’s legal team wrote.

UPDATED, with comment from AG: Oregon‘s attorney general has dropped a civil investigative demand for Paramount to turn over records related to its efforts to secure federal approval for its merger with Warner Bros. Discovery.

Oregon Attorney General Dan Rayfield also had asked a state circuit court judge to order Paramount to turn over the materials and to delay Paramount’s closing of its proposed acquisition of Warner Bros. Discovery by 60 days so the documents could be reviewed. A hearing has been scheduled for Monday in Multnomah County Circuit Court.

A Paramount spokesperson said, “We are pleased that the Oregon Attorney General has withdrawn its motion to delay this transaction. It was the right decision and avoids an unwarranted effort to delay a lawful, pro-competitive merger.

“Antitrust authorities around the world have carefully reviewed this transaction, clearing it or concluding that it does not violate any competition laws. That regulatory record underscores what the facts, the law and the economics make clear: this transaction will create a stronger challenger to dominant global streaming and technology platforms, expand consumer choice, increase investment in premium content and theatrical distribution, and create more opportunities for creators and workers. We look forward to completing the transaction and delivering those benefits.”

Jenny Hansson, communications director for Rayfield, said in a statement, “Paramount made it clear that they weren’t going to comply with the investigative demand, and that they think they’re above the law. We’re not going to let them waste Oregonians’ resources on these games. We’ve withdrawn the motion to consider our next steps.”

California Attorney General Rob Bonta and other state attorneys general are said to be considering a legal challenge to the transaction.

Rayfield sought Paramount records of lobbying of federal officials, as well as its role in a statement that the DOJ released in support of the transaction. The attorney general also sought documents “related to the formulation and execution of lobbying strategies aimed at obtaining regulatory approval of the proposed merger, which Respond as internally named ‘Project Warrior.’”

In a court filing, Paramount has objected to the document requests, arguing, among other things, that they impose “burdens and demands which are disproportionate” to the Oregon investigation and are “of such marginal relevance that the value of any materials sought is outweighed by the burden imposed on Paramount in having to provide such information.”

“Lobbying activities and related communications are wholly irrelevant to whether the proposed acquisition ‘violates Oregon’s antitrust laws,’” the company’s legal team wrote.