Judge extends stay on Paramount-Warner Bros. deal

A federal judge said Thursday that Paramount cannot close its acquisition of Warner Bros. Discovery until at least August 18 as it considers two lawsuits seeking to block the deal.

The move extended the pause on the deal. On Monday, Judge Araceli Martínez-Olguín of the US District Court for the Northern District of California froze the deal for 14 days after a group of states filed a lawsuit to stop the acquisition, citing antitrust concerns. In that decision, it said it would hold a hearing on Aug. 3 on whether to issue an injunction that would block the store from closing during the litigation.

However, Paramount asked Judge Martínez-Olguín to postpone that hearing until later in August and allow witnesses to testify. The Writers Guild of America, which filed its own lawsuit against the deal this month, also asked it to consider its request for an injunction at the same time as the states’ request. He claims the deal would hurt screenwriters.

On Thursday, Judge Martínez-Olguín extended the order delaying the transaction by 14 days until August 17. She also said she is open to postponing the talks, even beyond that date, if all parties agree to a new schedule and if Paramount commits not to closing the deal in the meantime.

The litigation could derail Paramount’s efforts to build a Hollywood behemoth that includes two movie studios, streaming services HBO Max and Paramount+, and television stations CBS and CNN. The delay could be costly: Starting in October, Paramount pledged to pay $650 million to Warner Bros. shareholders. Discovery for each quarter that the two companies did not close a deal.

A spokeswoman for California Attorney General Rob Bonta, who is leading the state’s lawsuit, said his office looks forward to arguing its case and “blocking Paramount’s illegal acquisition of Warner Bros.” A Paramount spokeswoman did not immediately respond to a request for comment.