Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS NEWS: Paramount agrees to pause Warner Bros. merger amid legal challenges, (Jul 27, 2026)

By Brian Craig, J.D.

The stipulation pauses the proposed merger until June 1, 2027, or five days after the pending lawsuits are resolved.

The proposed blockbuster merger of Paramount and Warner Bros. has been put on hold amid legal challenges, based on a stipulation not to close the merger reached between several states, the Writers Guild of America, and the entertainment companies in a filing with the federal district court in Oakland, California. The California Attorney General announced that the consortium of 12 states—California, Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington—submitted a stipulation reached with Paramount, Warner Bros., and the Writers Guild of America to pause the proposed merger until June 1, 2027, or five days after the pending antitrust lawsuits are resolved. The stipulation follows a temporary restraining order issued by the court to temporarily halt the proposed merger (The State Of California v. Paramount Skydance Corp., No. 4:26-cv-07116-AMO (N.D. Cal. Jul. 24, 2026)).

Background. In May 2026, five consumers of video, news, and film media filed a private antitrust action, Faust v. Paramount Skydance Corp., No. 3:26-cv-03790-AMO, under Section 7 of the Clayton Act challenging the proposed Paramount Skydance acquisition of Warner Bros. Discovery. They also challenged the Skydance acquisition of Paramount Global completed last year.

On July 13, 2026, California Attorney General Rob Bonta announced that his office was leading a coalition of 12 state attorneys general to block Paramount Skydance from acquiring Warner Bros. Discovery in The State of California et al v. Paramount Skydance Corporation et al., Case No. 26-cv-07116. In that matter, the states of California, Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington (collectively, the states), moved for a temporary restraining order (TRO) to stop Paramount from closing or consummating its acquisition of Warner Bros. or taking any steps to integrate or consolidate their operations.

The proposed merger between two of the nation’s five major film distributors would leave only four to control over 85 percent of all wide-release theatrical films in the United States.

On July 15, the federal district court in Oakland, California, granted administrative motions by plaintiffs in State of California and Writers Guild of America, West, Inc., et al. v. Paramount Skydance Corporation et al., Case No. 3:26-cv-07212, to relate their cases with Faust, the lowest-numbered case presently before the court. The court applied Civil Local Rule 3-12(a) and found the actions were substantially about the same parties, and an injunction of the same proposed merger transaction, such that it would be unduly burdensome to have duplicative actions before different judges. The court vacated all case management conferences in the three cases, to be rescheduled later, but the briefing schedule set in State of California stands.

On July 20, 2026, U.S. District Judge Araceli Martínez-Olguín granted a temporary restraining order to pause the acquisition. The court found that the States raise serious questions on the merits of their Clayton Act claim and because the balance of equities and public interest tip sharply in favor of the States, and the public interest favors, the court granted the request for a temporary restraining order to stay the merger in the interim.

Settlement terms. The terms of the stipulation filed with the court on July 24 provide that Paramount and Warner Bros. agree not to finalize the proposed merger until June 1, 2027, or five days after the pending lawsuits are resolved, whichever comes earlier. If the court finds in favor of the states, the merger would be blocked pending appeal. If the court finds no merits by June 1, 2027, the states can file a motion for a preliminary injunction. The stipulation extends to the agents, officers, employees, attorneys, and other persons who are in active concert or participation with the entertainment companies. The stipulation requests cancellation of an upcoming hearing scheduled for August 3, and the parties will submit a trial scheduling joint statement by July 31. Along with the stipulation, the parties submitted a proposed order for the judge to sign.

Comments on settlement. “Our argument against this illegal merger is straightforward: When too few corporations have too much power in markets central to American life, it makes things more expensive, and it makes things worse,” said California Attorney General Rob Bonta. “Today’s agreement is great news for audiences, movie theaters, and the many people who write, build, and create the art, news, and entertainment so many of us enjoy. We are eager to continue to make our case in court and celebrate another tremendous win in our effort to ensure this unlawful merger never sees the light of day.”

The Case is No. 4:26-cv-07116-AMO.

Judge: Martínez-Olguín, A.

Attorneys: Ashley Kaplan, California Department of Justice, for The State of California. Jeanifer Ellen Parsigian (Winston Taylor LLP) for Paramount Skydance Corp.

Companies: Paramount Skydance Corp.

News: Antitrust AcquisitionsMergers CaliforniaNews