Judge delays ruling on Bonta bid to freeze Paramount takeover of WB Discovery
LOS ANGELES (KESQ) - A judge today heard arguments but declined to immediately issue a ruling regarding California's bid for a temporary restraining order freezing Paramount's planned $111 billion takeover of Warner Bros. Discovery.
The hearing in Oakland federal court stemmed from a lawsuit lodged Monday by California Attorney General Rob Bonta and 11 other state attorneys general challenging the proposed merger.
The coalition is seeking to pause the pending deal. U.S. District Judge Araceli Martinez-Olguin said she would issue a ruling by Wednesday.
The lawsuit, filed in the Northern District of California, claims that the takeover violates Section 7 of the Clayton Act, which holds that mergers that may substantially lessen competition or tend to create a monopoly are illegal.
Paramount CEO David Ellison is seeking to acquire WBD in a $111 billion deal that was expected to close during the third quarter of this year.
The lawsuit claims the deal would "lead to higher prices, lower quality and less content for film and television, harming movie theaters, basic cable distributors, and ultimately, audiences on every sofa and movie theater seat in the U.S."
Bonta said the merger -- considered one of the biggest media deals in history -- would put one company in charge of nearly one-third of all theatrical motion picture and basic cable programming.
A temporary restraining order would put the merger on hold for up to 28 days.
The Writers Guild of America sued Tuesday to block the deal on the grounds it violates federal antitrust law and would cause harm to writers.
The guild's lawsuit, filed jointly by the WGA East and West in the Northern District, alleges Paramount's pending acquisition of WBD would reduce opportunities, lower pay and worsen working conditions for writers.
The WGA argues that the elimination of a key competitor and the creation of a new dominant firm would result in reduction in the quantity and variety of theatrical films and television series as the merged company would have a greater ability to reduce output.
Furthermore, the complaint asserts that the merger would increase the ability for the few remaining companies to tacitly coordinate to further suppress competition for writers' work.
"With fewer competitors, the merged Paramount-Warner Bros. entity would have both the incentive and the ability to lower costs by suppressing writers' wages and reducing output,'' according to the complaint. "Writers will be paid less and have fewer employment opportunities."
