Paramount subscribers fail to block Warner Bros. merger
A handful of Paramount+ subscribers failed to block the Warner Bros. Discovery merger on Thursday after a federal judge denied their preliminary injunction. Paramount subscribers fail block efforts still matter because 12 state attorneys general will seek a temporary restraining order on Friday against the $111 billion deal.
Key Takeaways
- Judge Araceli Martinez-Olguin denied Paramount+ subscribers a preliminary injunction on Thursday.
- The judge said plaintiffs offered no evidence and raised doubts about their antitrust standing.
- Twelve attorneys general will ask Friday for a temporary restraining order to pause the merger.
- States allege the $111 billion deal would harm competition in theatrical and basic cable markets.
- Separate challenges from the Writers Guild and a Delaware shareholder suit are also underway.
According to Variety, the private plaintiffs sued in April, saying they faced price hikes and risked losing viewing options if the Paramount-Warner Bros. Discovery transaction closed.
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Why did Paramount+ subscribers lose their injunction bid?
At Thursday's hearing in Oakland, Calif., Judge Martinez-Olguin rejected the request for a preliminary injunction.
"It's extraordinary preliminary relief, and plaintiffs failed to submit a single item of evidence in support of the motion," the judge said, also citing "serious doubts" about the subscribers' standing to pursue antitrust claims.
Paramount has also moved to dismiss the suit. The judge took that motion under submission and asked subscribers' attorney Joseph Alioto how he would amend the case if allowed. Alioto said he would seek discovery already provided to California and other state attorneys general.
"We're a private group," Alioto said. "We're not a government. We don't have the tools of a government."
What happens when states try again on Friday?
Paramount faces a tougher procedural fight on Friday. A coalition of 12 attorneys general filed suit on Monday and is seeking a temporary restraining order to pause the merger.
The states argue the $111 billion combination would harm competition in the theatrical and basic cable markets. Earlier Thursday, Paramount filed its opposition, saying the states are unlikely to win and should not get a restraining order.
The state attorneys general and Paramount previously agreed to link the private-party case to the states' case, so Martinez-Olguin will also handle the state matter.
How did Paramount argue against the subscriber lawsuit?
Jeffrey Kessler, Paramount's lead lawyer, appeared in the Oakland courtroom Thursday afternoon. He argued that Alioto has recently filed five similar actions seeking to block major mergers—four involving some of the same individual plaintiffs—and has lost every one.
"It's very clear in this circuit and elsewhere that to get a preliminary injunction, you have to make a clear showing with evidence," Kessler argued. "And when there is no evidence, then you cannot get a preliminary injunction."
Alioto has previously sued over deals including Microsoft-Activision, Capitol One-Discover, Nippon Steel-U.S. Steel, Kroger-Albertsons, United-Continental, and T-Mobile-Sprint. Responding to Kessler, he said he was proud the plaintiffs filed other cases and claimed they were referred by Sen. Harry Reid because the Justice Department would not challenge those mergers.
Beyond the subscriber and state actions, the Writers Guild of America filed a federal antitrust suit against the merger on Tuesday. The Freedom of the Press Foundation and the Public Integrity Project also lodged a shareholder derivative suit in Delaware Chancery Court seeking to block the deal.