A federal judge has temporarily halted the Paramount-Warner Bros merger, handing an early victory to a coalition of twelve state attorneys general who argue the $110 billion deal would choke competition in film, television, and basic cable. The ruling came after California Attorney General Rob Bonta and his counterparts filed suit in federal court, despite the US Department of Justice having already cleared the transaction following an exhaustive eight-month review.
Twelve States, One Federal Judge
The lawsuit, case 4:26-cv-7116, was filed in the Northern District of California and names California, Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington as plaintiffs. Their core allegation is that combining two of Hollywood’s largest studios would reduce competition across three markets: wide-release theatrical distribution, top-grossing theatrical distribution, and basic cable licensing.
Judge Araceli Martinez-Olguin issued the temporary halt, according to Law Commentary. The states contend the merger would lead to higher prices, lower-quality content, and reduced output, ‘harming movie theaters, basic cable distributors, and ultimately, audiences on every sofa and movie theater seat in the U.S.,’ as the coalition’s filing described it, according to NPR.
Bonta was direct in his response to the ruling. ‘This is a critical first win in our case to ensure this megamerger never sees the light of day,’ he said in a statement. ‘History tells the tale of what happens when a few people have great power over markets that are central to Americans’ lives: fewer opportunities for more people, worse products and services for all people.’
The Paramount-Warner Bros Merger at Stake
Under the merger agreement dated 27 February 2026, Paramount would pay $31.00 per share in cash for all outstanding shares of Warner Bros. Discovery (WBD), implying an equity value of $81 billion and a total deal value of $110 billion including a ticking fee.
The transaction would unite Paramount+ and HBO Max under a single corporate roof and create one of the largest television network portfolios in the US, bringing together Paramount’s CBS and MTV with WBD’s CNN and HBO. Paramount chief executive David Ellison had said in May that the deal was on track to close by September.
The state challenge arrives despite an earlier green light from federal regulators. The DOJ concluded its antitrust probe after reviewing more than two million documents over eight months, ultimately concluding the deal would ‘increase competition across the media and entertainment ecosystem, with benefits for American consumers and workers,’ according to Fox Business. The statutory HSR waiting period expired on 19 February 2026, after Paramount certified compliance with a December 2025 information request, and the company declared there was ‘no statutory impediment in the U.S. to closing’ the acquisition.
Regulators elsewhere were also examining the deal. The DOJ had sent subpoenas seeking information on how the combination would affect studio output, content rights, and streaming competition, as well as its impact on cinemas. The European Commission was actively engaging third parties, and Canadian authorities had reached out to at least one company about the transaction, CNBC reported, citing Reuters sources.
The state coalition’s position is the sharpest public challenge yet to a deal that has attracted scrutiny from filmmakers, actors, and industry groups who fear further consolidation of US media. The California AG’s press release characterised the transaction as a ‘$110 billion acquisition of Warner Bros.’ and framed the temporary halt as the opening move in what Bonta described as a fully resourced legal fight. Paramount and WBD did not immediately respond to requests for comment.
The legal roadblock threatens Paramount’s ambition to build a streaming rival capable of competing with Netflix. Whether Judge Martinez-Olguin converts the temporary halt into a preliminary injunction, and how quickly either side pushes for a merits hearing, will determine whether Ellison’s September closing target survives the summer.
