Lawyers for Paramount and a coalition of state attorneys general spent 75 minutes Friday arguing before a federal judge over how to define a blockbuster, a semantic fight at the center of a much larger battle over whether Paramount’s $110 billion merger with Warner Bros. Discovery should proceed on schedule.
Judge Araceli Martínez-Olguín of the Northern District of California heard the states’ request for a temporary restraining order that would freeze the deal while their antitrust lawsuit moves forward. Twelve attorneys general, led by California’s Rob Bonta, sued Monday, arguing the combined company would control 27% of wide-release theatrical distribution, 30% of what they call the market for anticipated blockbuster films, and 27% of the basic cable bundle. Paramount’s attorney, Jeffrey Kessler, called the states’ case one of the weakest antitrust challenges brought against a merger in recent memory and insisted the combination would boost, not shrink, competition.
Much of the argument turned on which recent films count as blockbusters and what that says about the health of the theatrical market. Kessler pointed to Apple’s “F1” and Amazon MGM’s “Project Hail Mary” as evidence that new entrants can still break through. James Weingarten, representing the states, countered that “F1” was distributed by Warner Bros. rather than Apple itself, quipping that Apple makes phones, not movies. Kessler also noted Amazon’s commitment to release 15 films theatrically each year as a sign of a competitive landscape rather than a shrinking one.
Money added urgency to the proceedings. Paramount’s controlling shareholders, the Ellison family, agreed to pay Warner Bros. Discovery roughly $7.2 million a day starting October 1 if the merger has not closed by then, a penalty built in to reassure Warner’s board when it accepted the offer. Kessler asked the judge to skip the temporary restraining order altogether in exchange for a promise to rule on a preliminary injunction by early September, while Martínez-Olguín noted at one point that Paramount appeared to concede it would suffer no harm if the pause were granted anyway.
The judge said she would rule within the week, a decision that will land close to when European regulators are expected to decide whether to clear the deal outright or push it into a deeper investigation. The U.S. Department of Justice has already cleared the transaction, and a separate suit from a Paramount+ subscriber group seeking to block the deal was rejected by the same judge earlier this week. The Writers Guild of America has also sued, arguing the merger would leave writers with fewer buyers for their work.
