Paramount Buyout Of AEW Media Partner WBD Put On Hold By Judge

For the last several months, Paramount's buyout of AEW's media partner Warner Brothers Discovery seemed to be a foregone conclusion. But a new development has now cast some doubt regarding whether the merger will actually go through. Variety reports that Judge Araceli Martinez-Olguin ordered a temporary halt to the merger on Monday, just days after a 12 state coalition filed for a temporary restraining order against the merger. The coalition is arguing the merger will "harm competition in the basic cable and theatrical markets by combining two of the top three cable programmers and two of the top five film distributors," and thus violate anti-trust laws.

With the restraining order granted, the Paramount-WBD merger can now not be closed for up to 28 days. However, the state coalition, led by California, is aiming higher, seeking a preliminary injunction regarding the case. If granted, it would mean the Paramount-WBD merger would be blocked until a judge was able to rule on the coalition's lawsuit. The injunction filing is seen as key; if the judge rules against it, it would allow the merger to close with little difficulty, but if the judge grants it, it would put the deal at risk, especially with a potential trial looming.

In addition, Paramount is also faced with the possibility of paying millions, per day, to WBD investors if the merger isn't finalized by September 30. As a result, the media conglomerate is looking to get a hearing on the injunction done as soon as possible, pushing for the hearing to take place in late August with "live witnesses." If done so, it could lead to a ruling in September, which would allow Paramount to avoid the aforementioned payments to WBD shareholders. At the same time, Judge Martinez-Olguin suggested in her decision that Paramount "conceded it would not be harmed by a temporary pause," with the conglomerate's lawyer, Jeffrey Kessler, even offering to stipulate the merger wouldn't close over the next 30 days.