Judge Holds Off Ruling on Paramount–States Antitrust Settlement for WBD Deal

U.S. District Judge Araceli Martínez-Olguín declined Thursday to rule immediately on Paramount Skydance’s proposed antitrust settlement with 12 state attorneys general, leaving the last major legal hurdle to the studio’s roughly $111 billion acquisition of Warner Bros. Discovery unresolved for now, the Los Angeles Times and Deadline reported.

Martínez-Olguín did not tip her hand on the eventual outcome. She said she wanted more information before deciding whether to approve the proposed consent decree — a court-enforceable agreement that would let the merger proceed under conditions — and noted broad outside interest in the case. “I’m not the only one who has some questions for you all,” she said, adding that she would rule “in due course,” according to the Los Angeles Times.

The hearing came three days after California Attorney General Rob Bonta announced that Paramount and the states had reached a deal. Under the proposal, the combined company would release at least 30 films in theaters each year, commit at least an additional $1.5 billion to domestic film production, and set aside $47.5 million for workers affected by the merger, the Times reported.

The settlement also covers how basic-cable channel negotiations must proceed, creates a board meant to protect the editorial independence of CBS News and CNN, and bars Paramount from selling or closing its Melrose Avenue lot or the Warner Bros. Burbank lot, requiring those campuses to operate “in a manner consistent with past practices.” An independent monitor would oversee implementation for five years if the judge approves the decree.

For readers following Hollywood deal politics on Studio, Thursday’s delay narrative is distinct from earlier coverage of Block the Merger’s amicus campaign. Hours before the hearing, Martínez-Olguín granted administrative motions allowing Block the Merger and the League of United Latin American Citizens to file amicus briefs, with a hard deadline of 12:01 a.m. PT on September 25, Deadline reported. Free Press Co-CEO Jessica J. González, co-counsel for Block the Merger, said the group would argue the consent decree is “weak and unenforceable.”

Paramount had opposed that process, warning that non-party briefing could force “tens (if not hundreds) of millions of dollars of payments” without the protections of a full antitrust injunction fight. The company’s opposition filing argued that allowing non-parties to delay closing without filing their own Clayton Act action or posting a bond would be improper, Deadline said. The judge granted the amicus window anyway.

At the hearing, Paula Blizzard, an attorney for California, stressed theater-supply concerns: when theater owners say supply is the problem, those are market voices the states are trying to protect. Josh Holian, an attorney for Paramount, said the company wants to compete with larger streaming rivals such as Netflix, Amazon and Disney and views the transaction as transformative, the Times reported.

Sen. Cory Booker (D-N.J.), the top Democrat on the Senate Judiciary Subcommittee on Antitrust, sent a letter asking the court for an “independent public-interest review,” arguing that because the U.S. Justice Department closed its investigation without remedies, the state settlement is “the only enforceable instrument that will govern” the combined company. Martínez-Olguín ordered the parties to respond to Booker’s letter by noon on September 28, the Times said.

The calendar pressure is financial as well as political. Warner Bros. Discovery CEO David Zaslav had told staff he expected the deal to close no later than early October. Paramount faces a roughly $7 million-a-day ticking fee to WBD shareholders beginning October 1 — more than $630 million a quarter — Deadline noted, after CEO David Ellison had publicly envisioned closing within about two weeks of the settlement announcement.

Hollywood remains split over the decree. Critics say Bonta bowed to pressure from Los Angeles Mayor Karen Bass and California Gov. Gavin Newsom after Paramount threatened to leave the state; Ellison has since said the combined company would remain in Los Angeles. A recent L.A. County–commissioned report estimated about 4,500 jobs could be lost over three years even as Paramount has told Wall Street it plans more than $6 billion in cost cuts, the Times reported. Until Martínez-Olguín rules — after amicus briefs and the Booker-letter responses — the $111 billion path to closing stays on hold.