Paramount Warner merger injunction fight heads toward mini-trial request
Paramount wants a three-day hearing before a judge decides whether to pause its Warner Bros. Discovery deal for months.
By Bianca Rossi · Entertainment Editor
3 min read
Paramount is asking a federal judge for a three-day evidentiary hearing in the Paramount Warner merger injunction fight, arguing that it should get a fuller chance to challenge states trying to freeze its Warner Bros. Discovery takeover.
In a Wednesday court filing, Paramount proposed what amounts to a short trial later in August, either during the week of Aug. 17 or the week of Aug. 24. The company also said it would agree to extend the current temporary restraining order until the judge rules.
U.S. District Judge Araceli Martinez-Olguin on Monday temporarily blocked the transaction for two weeks. She also scheduled an Aug. 3 hearing on whether to issue a longer preliminary injunction while the antitrust case moves ahead.
The case was filed last week by California and 11 other states. The states are seeking to stop the deal on antitrust grounds while the litigation continues.
Why does Paramount want a three-day hearing?
Paramount’s lawyers said the states are asking for a severe remedy that could hold up the merger for at least eight months. In the filing, they argued the company should be allowed a full hearing before the court decides whether the transaction should be sidelined for that long.
The company said the judge has already identified factual disputes that matter to the antitrust analysis. Paramount’s filing said a hearing would let the court examine issues including the relevant market, how competition works in practice, barriers to growth and the companies’ incentives.
A preliminary injunction is a court order that can temporarily stop an action before a lawsuit is fully resolved. In merger cases, that can be decisive because delays can change the economics of a deal long before a final judgment arrives.
Paramount’s filing pointed to Sept. 30 as a key date. After that, the company says it must pay Warner Bros. Discovery a $7 million-per-day ticking fee if the transaction has not closed.
Paramount’s legal team, led by Jeffrey Kessler, told the court that an injunction would create uncertainty around the transaction and could cost the company well over $1 billion in ticking fees and other added expenses.
What happens next in court?
Judge Martinez-Olguin has set a fast briefing schedule. Under the current timetable, the state attorneys general are due to file their opening brief Thursday, Paramount’s response is due Monday and the states’ reply is due July 30.
Paramount proposed a different schedule tied to its request for an evidentiary hearing. Under that plan, opening briefs would be filed July 28, Paramount’s reply would come Aug. 7 and the attorneys general would respond Aug. 12.
A spokesperson for California Attorney General Rob Bonta said the office was reviewing Paramount’s filing and would respond as appropriate.
At last week’s hearing on the temporary restraining order, James Weingarten, an attorney for the state attorneys general, opposed an earlier Paramount schedule request. He said compressing expert disputes into a month would waste time and resources if it could be done at all.
The Writers Guild of America is also trying to stop the merger in a separate lawsuit. The guild has filed its own request for a preliminary injunction and wants its hearing aligned with the states’ Aug. 3 hearing.
Paramount’s lawyers said that schedule would not be workable, though they told the court that combining the timing could be possible later in August.
This story draws on original reporting from Deadline.