States Seek Injunction to Prevent Paramount-Warner Bros. Deal From Closing

California and 11 other states have filed for a temporary restraining order and a preliminary injunction to prevent the merger of Paramount and Warner Bros. Discovery from closing. The states, which include Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington, argue that the proposed $111 billion transaction would "extinguish competition" and lead to increased consumer prices. The motion was filed on Monday evening, with the states requesting that a federal judge act by July 22 (Primary Source, Deutsche Welle). The coalition of state attorneys general is challenging the merger despite the Department of Justice's decision last month to approve it, which reportedly surprised some career staff who were leaning toward recommending a lawsuit. The states allege that the merger violates the Clayton Act by reducing competition in the media industry and creating a "media behemoth" (Deadline, Variety). They warn that the merger could raise movie prices and negatively impact cable TV distributors (The Verge). Oregon's Attorney General Dan Rayfield had previously sought to delay the merger by requesting documents from Paramount related to the acquisition. However, he has since withdrawn his request for a civil investigative demand, which indicates a shift in the state's approach to the merger (The Verge). The states' legal actions represent a significant challenge to the merger, as they seek to halt the transaction while pursuing their antitrust lawsuit.