A mass media company aligned with President Donald Trump faces over $600 million in penalties after a federal judge halted its $110 billion bid to acquire Warner Bros. Discovery and CNN.
U.S. District Judge Araceli Martínez-Olguín issued the emergency order against Paramount Skydance on Monday, siding with a coalition of 12 states that sued to stop the deal a week earlier.
Paramount owes Warner Bros. shareholders an extra 25 cents per share for every quarter the deal is delayed past September 30, CNBC reported — roughly $650 million per quarter.
"Round one goes to the states," CNBC reporter Rohan Goswami wrote on X on Monday, adding that winning a preliminary injunction would be "90% of the battle."
The states argued the proposed deal would do lasting damage to Hollywood and American consumers. The merger, the order stated, "will eliminate competition between two of the remaining five major Hollywood studios in addition to combining two of the nation's largest cable television programmers."
President Donald Trump had made clear he wanted the Ellison family — Paramount chief executive David Ellison and his father, Oracle billionaire Larry Ellison — in charge of CNN.
"It's imperative that CNN be sold," Trump said last December, signaling his preference for Paramount's bid. The Trump administration's Justice Department cleared the merger in June without requiring Paramount to sell any assets or make any other concessions, CNN reported.
Judge Martínez-Olguín was unconvinced the deal was legal. Under antitrust law, a merger that concentrates a market is presumed unlawful — the company must prove the deal is safe, not the other way around.
The combined firm would control roughly 27% of the wide-release theatrical film market, she found, with market concentration spiking by approximately 359 points on the standard industry measure.
The ruling applied a long-standing legal standard: the proposed merger was "so inherently likely to lessen competition substantially that it must be enjoined."
Allowing the deal to close now, she added, would make the damage nearly impossible to reverse. Courts have long recognized that "since it is extraordinarily difficult to 'unscramble the egg,' 'it will be too late to preserve competition if no preliminary injunction has issued.'"
A hearing on a longer-term preliminary injunction is scheduled for August 3.